Following Munger's wisdom of reverse thinking ("invert, always invert"), there is one thing I always do before I take a meaningful position in a stock. I make a list of things that I would look out for that would prove my initial thesis wrong or no longer valid. I put more efforts into watching out to disprove my thesis than looking for confirmation echoes (esp if there is no new angle). I wonder what do you dig into in checking that DG's business model is intact beyond just assuming that this time it is again cyclical? What would convince you that your thesis is suspect besides the eventual price movement?

I often think the numbers are at best supplementary whereas an understanding of the potential evolution of the business environment is critical.

Falling Knives FAQ

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