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The Checklist

QAV Bible › The QAV Check­list
The Sys­tem · Step 3

The QAV Checklist

The engine behind every­thing QAV does. A sys­tem­at­ic, data-dri­ven score­card that eval­u­ates any stock across three dimen­sions — qual­i­ty, val­ue, and mar­ket sen­ti­ment — and dis­tils it to a sin­gle num­ber you can rank and com­pare.

What the check­list does

In the­o­ry, the check­list is pret­ty sim­ple. It’s designed to take the gam­bling and emo­tion out of invest­ing and make it more sci­en­tif­ic. It’s a quick way to work out if the stock of a com­pa­ny is like­ly to out­per­form the rest of the mar­ket. It con­tains a series of data inputs for each stock, scores them on those inputs, and cal­cu­lates ratios between some of the inputs to pro­duce a final QAV Score.

Tony devel­oped the sys­tem over 25+ years to help with his own invest­ing. It’s a dis­til­la­tion of every­thing he’s read and stud­ied — Ben­jamin Gra­ham, War­ren Buf­fett, and his own 30+ years of exper­i­men­ta­tion — refined down to a check­list you can run in a spread­sheet.

“The first thing to remem­ber is that it’s a tool — not a reli­gion. Use it to guide your think­ing, not as hard-and-fast rules. If you want to change it, go right ahead. Add things, remove things — it’s up to you. The cur­rent ver­sion of the check­list just reflects my cur­rent think­ing.”

Tony Kynas­ton
Think like a busi­ness buy­er
The Cof­fee Shop Anal­o­gy

Forget the stock market. Imagine you’re buying a café.

Tony uses this anal­o­gy to ground the check­list in com­mon sense. Imag­ine, instead of buy­ing shares in a large pub­lic com­pa­ny, you’re buy­ing a small local café. You’d want to know:

  • How much prof­it does the café make each year?
  • What kind of assets does it own — equip­ment, fit-out, inven­to­ry?
  • What are its debts?
  • How long has it been oper­at­ing, and is it get­ting bet­ter each year?
  • Are there any inde­pen­dent experts who can help me val­ue it?

The QAV check­list asks exact­ly the same ques­tions of pub­lic com­pa­nies — just in a sys­tem­at­ic, repeat­able way across the entire mar­ket. The prin­ci­ples are the same whether you’re buy­ing a café or a stake in a $10 bil­lion com­pa­ny.

The three pil­lars

Every check in the QAV check­list belongs to one of three cat­e­gories. A stock has to pass on all three to be worth buy­ing.

🏗️ Pil­lar 1

Quality

Is this a well-run, finan­cial­ly healthy busi­ness? Grow­ing equi­ty, con­sis­tent earn­ings, founder involve­ment, clean audits — these are the hall­marks of a qual­i­ty com­pa­ny worth own­ing.

💰 Pil­lar 2

At Value

Is the stock cheap rel­a­tive to what it’s actu­al­ly worth? The check­list cross-ref­er­ences mul­ti­ple inde­pen­dent val­u­a­tions — intrin­sic val­ue cal­cu­la­tions, price-to-book, PE ratio, cash ratio — to con­firm the stock is gen­uine­ly under­priced.

📈 Pil­lar 3

Sentiment

Is the mar­ket mov­ing in the right direc­tion? A great stock at a great price is still a bad buy if it’s in a down­trend. The check­list checks that price momen­tum con­firms the oppor­tu­ni­ty before you com­mit.

By the num­bers
30+ Data points eval­u­at­ed per stock
1 Final score that ranks every stock
3–6× Times a year you need to run it (once your port­fo­lio is estab­lished)
2× Tony’s approx­i­mate long-run out­per­for­mance vs. the mar­ket index
How the score works

Quality per dollar of value

Every check­list item that a stock pass­es earns a point. At the end, the check­list tal­lies those points into a QAV Score — a per­cent­age that rep­re­sents how much qual­i­ty you’re get­ting per dol­lar of val­ue.

The high­er the QAV Score, the more qual­i­ty you’re get­ting for your mon­ey. You rank every stock by its QAV Score and buy from the top — high­est score first — as long as the stock is also trad­ing below its intrin­sic val­ue.

The sys­tem nev­er tells you what to feel about a com­pa­ny. It tells you what the num­bers say. You buy the num­bers, not the sto­ry.

On the learn­ing curve

“There’s a learn­ing curve to get up to speed with it, and how steep that curve is will depend on your lev­el of exist­ing finan­cial lit­er­a­cy and Excel skills. My lev­el of lit­er­a­cy was quite low when we start­ed, and I think it took me about six months of spend­ing a cou­ple of hours a week talk­ing to Tony about it before I start­ed to feel real­ly com­fort­able with it. But now I can quick­ly work out which stocks pass the check­list and which do not.”

Cameron Reil­ly, QAV Pod­cast

The good news: you don’t need to fig­ure it out from scratch. The Check­list Walk­through takes you through every col­umn, one at a time, with plain-Eng­lish expla­na­tions of what you’re mea­sur­ing and why it mat­ters.

Ready to go column by column?

The Check­list Walk­through explains every data point in detail — where to find it, how to cal­cu­late it, and what the score means.

Start the Walk­through →
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QAV con­tent is edu­ca­tion­al and is not finan­cial advice. Tony Kynas­ton is not a finan­cial advis­er and does not pro­vide per­son­al finan­cial advice. Past per­for­mance is not a reli­able indi­ca­tor of future per­for­mance. Please con­sult a licensed finan­cial advis­er before mak­ing invest­ment deci­sions.
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