The Main Meta Programs

September 7, 2008

BASIC filter or sorting MPS:

-EB (Introvert/Extrovert – ‘what people actually do’ as a result of IP and IS – behavior manifested inside or outside ones self ‘introvert’ or ‘extrovert’)

-IP (Intuitor/Sensor – ‘how people do’ what they do – acting in a concrete practical manner/abstract creative manner – chunk size)

-IS (Thinker (Dissociated)/Feeler (Associated) – emotional states which explain ‘why people act’ as they do – two patterns why people decide to take a certain action either following an analysis of the situation at hand ‘thinkers’/because of their belief ‘feelers’)

-AR (Judger/Perceiver – ‘how people adapt’ to the environment – rigidity/flexibility)

COMPLEX filter or sorting MPS:

-Direction (Toward/Carrot-Away/Stick, Against, Object [nature/primary interest] + Intensity [motivation: satisfied-apathetic active-inactive] + Degree [can’t not do it-want to do-congruently desire in alignment w/ self concept-want over long term-must do or must have)

-Reason or Modal Operator (Possibility-Necessity)

-Frame of Reference (Locus of judgment Inside-Outside)

-Convincer (Representation System: See it-Hear it-Do it w/ them-Read about it or reads something they have written + Demonstration: Automatic-Consistent)

-Management (Self-Others)

-Action (Active-Reflective-Inactive)

-Affiliation (Independent-Management-Team)

-Work Preference (Things-Systems-People)

-Primary and Secondary Interest (People who-Place where-Things what-Activities how-Information why/what information)

-Chunk Size (Specific-Global, SpecificßàAbstract, Hierarchy of Ideas, 3 ways of presenting info: Descriptive / Evaluative / Interpretive + Other useful note about info: centrality/peripherality + level of abstraction: abstract/concrete + types of ambiguity: novel [uncertain/dubious/not enough/information] ways of classifying [linear/sequential/cybernetic])

-Relationship (sameness-differences, matching/mismatching)

-Emotional Stress Response (associated-dissociated-choice, emotionally or cooly)

-Time (Orientation: Past/Associated Feeler — Present/Sensor — Future/Intuitors — Atemporal/Dissociated Thinker + Storage: Through Time—In Time + Access: Random—Sequential)

-Modal Operator Sequence (Auditory digital component of motivation strategy and is the sequence of words that moves a person to action Modal Operator examples: Can/Can’t Will/Won’t It is possible/It is impossible Could/Couldn’t Would/Wouldn’t May/May Not Must/Must Not Should/Shouldn’t Have To [Got To]/Don’t Have To Necessary/Not Necessary Need To/Don’t Need To + they produce the modal operator-it comes from outside [see frame of reference])

-Attention Direction (Self-Others, How you show others your level of interest in them)

-Goal (Perfection-Optimization)

-Comparison (Self to self[past present future ideal]-Self to others[who? ‘he’s got more than I do’]-Others to others[whom to whom? gossip] + Quantitative-Qualitative)

-Knowledge (Modeling/Concepts-Demonstration-Experience (they’ve done it or seen it done)-Authority)

-Completion (Beginning-Middle-End, where rather be involved in starting or completing task)

-Closure (Open Loop-Closed Loop, able to deal with open loops?)

The Charlie Munger Checklists

September 7, 2008

“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.”

“It is not given to human beings to have such talent that they can just know everything about everything all the time but it is given to human beings who work hard at it, who look and sift the world for a mispriced bet, that they can occasionally find one. The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t. It’s just that simple.”

The Charlie Munger Checklist…for Psychology…
“Grand General Principle of Social Psychology: Cognition is ordinarily situation-dependent so that different situations often cause different conclusions, even when the same person is thinking in the same general subject area.”
– reward/punishment
– liking/loving
– disliking/hating
– doubt avoidance
– inconsistency avoidance
– curiosity
– Kantian fairness
– envy/jealousy
– reciprocation
– influence from mere association
– simple pain avoiding psychological denial
– excessive self regard
– overoptimism
– deprival
– social proof
– contrast misreaction
– stress influence
– availability misweighing
– authority misinfluence
– reason respecting
– drug misinfluence
– use it or lose it
– senescence misinfluence
– twaddle
– LOLLAPALOOZA of the above forces
“The 25 standard causes of human misjudgment…Reward/Punishement, Liking/Loving, Disliking/Hating, Doubt-Avoidance, Inconsistency-Avoidance, Curiosity, Kantian Fairness, Envy/Jealousy, Reciprocation, Influence From Mere Association/Association, Simple Pain Avoiding Psychological Denial, Excessive Self Regard, Overoptimism, Deprival Reaction (loss experience of possessed or almost possessed reward), Social Proof, Contrast Misreaction, Stress Influence, Availability Misweighting, Use It Or Lose It, Drug Misinfluence, Senescence Misinfluence, Authority Misinfluence, Reason Respecting, Twaddle, Lollapalooza (in getting extreme consequences from streams flowing together/confluences of psychological tendencies acting in favor of a particular outcome)”

The Charlie Munger Checklist…of Ultra Simple General Problem Solving Notions…
Decide the big ‘no brainer’ questions first, Apply numerical fluency, Invert (think the problem through in reverse), Apply elementary multidisciplinary wisdom never relying entirely upon others, Watch for combinations of factors the Lollapalooza effect
1. Decide big no brainer questions first
2. Apply numerical fluency
3. Invert – think problems through in reverse
4. Apply elementary multidisciplinary wisdom never relying entirely upon others
5. Watch for combination of factors – Lollapalooza effect

The Charlie Munger Checklist…for Investing and Decision Making…
…Preparation. Discipline. Patience. Decisiveness…
Risk – All investment evaluations should begin by measuring risk, especially reputational
* Incorporate an appropriate margin of safety
* Avoid dealing with people of questionable character
* Insist upon proper compensation for risk assumed
* Always beware of inflation and interest rate exposures
* Avoid big mistakes; shun permanent capital loss
Independence – “Only in fairy tales are emperors told they are naked”
* Objectivity and rationality require independence of thought
* Remember that just because other people agree or disagree with you doesn’t make you right or wrong – the only thing that matters is the correctness of your analysis and judgment
* Mimicking the herd invites regression to the mean (merely average performance)
Preparation – “The only way to win is to work, work, work, work, and hope to have a few insights”
* Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day
* More important than the will to win is the will to prepare
* Develop fluency in mental models from the major academic disciplines
* If you want to get smart, the question you have to keep asking is “why, why, why?”
Intellectual humility – Acknowledging what you don’t know is the dawning of wisdom
* Stay within a well-defined circle of competence
* Identify and reconcile disconfirming evidence
* Resist the craving for false precision, false certainties, etc.
* Above all, never fool yourself, and remember that you are the easiest person to fool
Analytic rigor – Use of the scientific method and effective checklists minimizes errors and omissions
* Determine value apart from price; progress apart from activity; wealth apart from size
* It is better to remember the obvious than to grasp the esoteric
* Be a business analyst, not a market, macroeconomic, or security analyst
* Consider totality of risk and effect; look always at potential second order and higher level impacts
* Think forwards and backwards – Invert, always invert
Allocation – Proper allocation of capital is an investor’s number one job
* Remember that highest and best use is always measured by the next best use (opportunity cost)
* Good ideas are rare – when the odds are greatly in your favor, bet (allocate) heavily
* Don’t “fall in love” with an investment – be situation-dependent and opportunity-driven
Patience – Resist the natural human bias to act
* “Compound interest is the eighth wonder of the world” (Einstein); never interrupt it unnecessarily
* Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake
* Be alert for the arrival of luck
* Enjoy the process along with the proceeds, because the process is where you live
Decisiveness – When proper circumstances present themselves, act with decisiveness and conviction
* Be fearful when others are greedy, and greedy when others are fearful
* Opportunity doesn’t come often, so seize it when it comes
* Opportunity meeting the prepared mind; that’s the game
Change – Live with change and accept unremovable complexity
* Recognize and adapt to the true nature of the world around you; don’t expect it to adapt to you
* Continually challenge and willingly amend your “best-loved ideas”
* Recognize reality even when you don’t like it – especially when you don’t like it
Focus – Keep things simple and remember what you set out to do
* Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat
* Guard against the effects of hubris (arrogance) and boredom
* Don’t overlook the obvious by drowning in minutiae (the small details)
* Be careful to exclude unneeded information or slop: “A small leak can sink a great ship”
* Face your big troubles; don’t sweep them under the rug
…Preparation. Discipline. Patience. Decisiveness…

The Charlie Munger Checklist…for 2-track analysis…
“what are the factors that really govern the interests involved rationally considered (i.e. macro and micro level economic factors) and what are the subconscious influences where the brain at a subconscious level is automatically”
“2 track analysis: what are the factors that really govern the interests involved here rationally considered (i.e. macro and micro level economic factors) and what are the subconscious influences where the brain at a subconscious level is automatically forming conclusions (i.e. influences from instincts, emotions, cravings, and so on)”

The Charlie Munger Investment Criteria Logic – The High Quality Business
“Over the long term, it’s hard for a stock to earn a much better return than the business which underlies it earns. If the business earns 6% on capital over 40 years and you hold it for that 40 years, you’re not going to make much different than a 6% return – even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive looking price, you’ll end up with a fine result. So the trick is getting into better businesses.”
“I’d say that Berkshire Hathaway’s system is adapting to the nature of the investment problem as it really is. We’ve really made the money out of high quality businesses. In some cases, we bought the whole business. And in some cases, we just bought a big block of stock. But when you analyze what happened, the big money’s been made in the high quality businesses. And most of the other people who’ve made a lot of money have done so in high quality businesses.”
a. Find them small b. Find them big c. And ideally – and we’ve done a lot of this – you get into a great business which also has a great manager because management matters.
“So you do get an occasional opportunity to get into a wonderful business that’s being run by a wonderful manager. And, of course, that’s hog heaven day. If you don’t load up when you get those opportunities, it’s a big mistake…Occasionally, you’ll find a human being who’s so talented that he can do things that ordinary skilled mortals can’t. I would argue that Simon Marks – who was second generation in Marks & Spencer of England – was such a man. Patterson was such a man at National Cash Register. And Sam Walton was such a man. These people do come along – and in many cases, they’re not all that hard to identify. If they’ve got a reasonable hand – with the fanaticism and intelligence and so on that these people generally bring to the party – then management can matter much…However, averaged out, betting on the quality of a business is better than betting on the quality of management. In other words, if you have to choose one, bet on the business momentum, not the brilliance of the manager. But, very rarely. you find a manager who’s so good that you’re wise to follow him into what looks like a mediocre business…”
“If you’re going to buy something which compounds for 30 years at 15% per annum and you pay one 35% tax at the very end, the way that works out is that after taxes, you keep 13.3% per annum. In contrast, if you bought the same investment, but had to pay taxes every year of 35% out of the 15% that you earned, then your return would be 15% minus 35% of 15% – or only 9.75% per year compounded. So the difference there is over 3.5%. And what 3.5% does to the numbers over long holding periods like 30 years is truly eye-opening.”
“There are huge advantages for an individual to get into a position where you make a few great investments and just sit back and wait: You’re paying less to brokers. You’re listening to less nonsense. And if it works, the governmental tax system gives you an extra 1, 2 or 3 percentage points per annum compounded”
Risks: paying 50 or 70 times earnings like in the Nifty Fifties. But if you can find some fairly priced great company and buy it and sit, that tend to work out very, very well indeed.

Some of Charlie’s Models
* Growth Sub-position Untapped Pricing Power
* Graham Style+Great Management+Winner Take All
* Low Priced+Marketing Advantage(+Surfing New Technology)
* Cancer Surgery Formula (Perfectly magnificent business submerged in a mess but still working where you find something sound and cut away everything and if doesn’t work liquidate, sick-business-fix-up, bunch of foolishness that could easily be cut out and cut out all the folly and go back to the perfectly wonderful business that was lying there and people come in temperamentally and intellectually designed so they are going to cut it out)

COLLECT INANITIES … become a collector of inanities. You’ll never run out or get bored.

“The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you’re paying for. Move only when you have an advantage. It’s very basic. You have to understand the odds and have the discipline to bet only when the odds are in your favor. We just keep our heads down and handle the headwinds and tailwinds as best we can, and take the result after a periods of years.”

“We’re trying to buy businesses with sustainable competitive advantages at a low, or even fair, price.”

…betting on sure things…

“Keep learning and get better over time gradually. Warren has learned alot which allowed him to expand his circle of competence so he could invest in something like PetroChina. Get a little better over time so you’re virtually certain to make investments that are virtually certain to be good over time. Discipline, hard work and patience are the keys. Other people pass you by when you don’t learn. You have to work on it.”

“light on financial yardsticks w/ lots of subjective criteria; can we trust management? can it harm our reputation? what can go wrong? do we understand the business? does it require capital infusions to keep it going? what is the expected cash flow? We don’t expect linear growth; cyclicality is fine with us as long as the price is appropriate.”

“don’t sell anything you wouldn’t buy yourself
don’t work for anyone you don’t respect and admire
work only with people you enjoy”

“There’s no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”

– seamless web of deserved trust
– false precision, false certainty
– invert everything…just in case
– avoid extremely intense ideology
– “pounding it in” vs flexibility/destroying best loved ideas/adaptive

“The best investing opportunities as mispriced bets on horses
“What we’re really looking for are 50-50 odds which pay three to one””

“”Regard your good name as the richest jewel you can possibly be possessed of – for credit is like fire; when once you have kindled it you may easily preserve it, but if you once extinguish it, you will find it an arduous task to rekindle it again. The way to gain a good reputation is to endeavor to be what you desire to appear.” – Socrates”

“Taiwan 7.6 magnitude earthquake damage -> “Much of the damage resulted from inadequate steel reinforcement in concrete structures””

“The antidote to man with a hammer is a tool kit full of tools, not just a hammer. And use the tools checklist style because you’ll miss a lot if you hope the right tool just pops up unaided whenever you need it. But if you’ve got a full list of tools and you go through them in your mind checklist-style, you will find a lot of the answers you won’t find any other way.”

“Economics should emulate physics’ basic ethos, but its search for precision in physics-like formulas is almost always wrong in economics.”

“Well, how did I solve those problems? Obviously, I was using a simple search engine in my mind to go through checklist-style, and I was using some rough algorithms that work pretty well in a great many complex systems, and those algorithms run something like this: Extreme success is likely to be caused by some combination of the following factors:
A) Extreme maximization or minimization of one or two variables. (Examples, costco or our funiture appliance store)
B) Adding success factors so that a bigger combination drives success, often in non-linear fashion, as one is reminded of the concept of breakpoint and the concept of critical mass in physics. Often results are not linear. You get a little bit more mass, and you get a lollapalooza result. And, of course, I’ve been searching for lollapalooza results all my life, so I’m very interested in models that explain their occurence.
C) An extreme of good performance over many factors. (Example, Toyota or Les Schwab)
D) Catching and riding some sort of big wave. (Example, Oracle)”

“Too little attention to second and higher order effects. They chose not to consider effects of effects on effects, and so on…hence why predictions and projections can be so far off. (The movement of any individual piece affects, sometimes dramatically, the overall composition)”
“Avoid creating easily gameable systems and take into account second-order effects and the third-order effects in lying and cheating (i.e. Niederhoffer gaming the economics department system at Harvard to get straight A’s). One must think through consequences of consequences.”
“Economic systems work better when there’s an extreme reliability ethos (i.e. cash register, double entry bookkeeping). And the traditional way to get a reliability ethos, at least in past generations in America, was through religion. The religion instilled guilt. And this guilt, derived from religion, has been a huge driver of a reliability ethos, which has been very helpful to economic outcomes for man.”
“The craving for perfect fairness causes a lot of terrible problems in system function. Some systems should be made deliberately unfair to individuals because they’ll be fairer on average for all of us. Thus, there can be virtue in apparent non-fariness.”
“Paradox: “private vices are public benefits””
“”It’s not bringing in new ideas that’s so hard. It’s getting rid of the old ones.” Einstein attributing his mental success to “curiosity, concentration, perserverence, and self criticism”. By self critisism, he meant becoming good at destroying your own best loved and hardest won ideas. If you can get really good at destroying your own wrong ideas, that is a great gift.”
“Theme of TRUST: deserved reliance upon the character, values and integrity of those you live and work with. No matter how smart you are, there are smart people out there who can fool you if they really want to. So, be sure you can trust the smart people you work with.”

“I have succeeded mostly by restricting action to jobs and methods in which I was unlikely to fail”

“The Perception system of man – as man is easily fooled, either by cleverly thought out manipulation of man, by circumstances occuring by accident, or by very effective manipulation practices that man has stumbled into during ‘practice evolution’ and kept in place because they work so well. One such outcome is caused by a quantum effect in human perception. If stimulus is kept below a certain level, it does not get through. And even when perception does get through to man’s brain, it is often misweighed, because what is registered in perception is in shockingness of apparent contrast, not the standard scientific units that make possible science and good engineering.”
“Inadequacy of contrast-based perception (i.e. stick one hand in hot, one hand in cold, and now both in luke warm and they are both hot and cold respectively) One thus sees perception so easily fooled by mere contrast, where a simple temperature gauge would make no error, and realizes cognition mimics perception in being misled by mere contrast. Thus, one is one the way to understanding how magicians, and life, fools one.
This can occur, through deliberate human manipulation or otherwise, if one doesn’t take certain precautions against often-wrong effects from generally useful tendencies in his perception and cognition.”

“Super strong ideology left or right should be avoided. Best-form multidisciplinarity requires an objectivity such passionate people have lost, and a difficult synthesis is not likely to be achieved by minds in ideological fetters. Ideology-based folly.”

“The fundamental organizing ethos I am talking about:
1. you must both rank and use disciplines in order of fundamentalness
2. You must master the tested fluency and routinely use the essential parts of all four constitutents of the fundamental four-discipline combination, with particularly intense attention given to disciplines more fundamental than your own
3. You may never practice cross-disciplinary absorption without attribution or departure from a ‘principle of economy’ that forbids explaining in any other way anything readily explainable from more fundamental material in your own or any other discipline
4. But when step 3 doesn’t produce much new and useful insight, you should hypothesize and test to establishment new principles, ordinarily by using methods similar to those that created succcessful old principles. But you may not use any new principles inconsistent with an old one unless you can now prove that the old principle is not true.”

“Like pilot training, the ethos of hard science does not say ‘take what you wish’ but ‘learn it all to fluency, like it or not.'”


“Wrong incentives are a major cause because truth is hard to assimilate in any mind when opposed by interest. And, if institutional incentives cause the problem, then a remedy is feasible – because incentives can be changed.”
“And if duty will not move improvement, advantage is also available.”

“”I read everything: annual reports, 10k’s, 10q’s, biographies, histories, five newspapers a day. On airplanes, I read the instructions on the backs of seats. Reading is key. Reading has made me rich over time” – Buffett”

“Using Forbes, WSJ, Fortune magazines periodicals to perform the function of the aircraft simulator if used to prompt practice in relating events to multidisciplinary causes, often intertwined (i.e. ‘use it or lose it’) And sometimes the periodicals even introduce new models for causes instead of merely refreshing old knowledge. I know no person in business, respected for verified good judgement, whose wisdom-maintenance system does not include use of such periodicals. Why should academia be different?”

“”This business field and this particular business, in its particular location, present crucial problems that are so difficult that unworldly old ladies can not wisely try and solve them through hired help. Given the difficulties and unavoidable agency costs, the old ladies should promptly sell the shoe factory, probably to the competitor who would enjoy the greatest marginal-utility advantage””

“”We regard the present state of the universe as the effect of its past and the cause of its future. And intellect which at a certain moment would know all forces that set nature in motion, and all positions of all items of which nature is composed, if this intellect were also vast enough to submit these data to analysis, it would embrace in a single formula the movement of the greatest bodies of the universe and those of the tiniest atom; for such an intellect nothing would be uncertain and the future just like the past would be present before its eyes.” – Pierre-Simon Laplace”

“Truly big ideas in each discipline, learned only in essence, carry most of the freight. And they are not so numerous, nor are their interactions so complex, that a large and multidisciplinary understanding is impossible for many, given large amounts of talent and time.”

“Thinking by inversion and through use of ‘checklists’ is easily learned – in broadscale life as in piloting.”

“In my life there are not many questions I can’t properly deal with using my $40 adding machine and dog-eared compound interest table”

“Four causes of Einstein’s achievements being self criticism, curiosity, concentration, and perseverance.”

“If, in many high places, a universal product as successful as Coca-Cola is not properly understood and explained, it can’t bode well for our competency in dealing with much else that is important.”

“People are often massively irrational in ways predicted by psychology that must be taken into account in microeconomics.”

“Think in reverse as you try and disprove your own hardest-won and best-loved ideas.”

“”We build too many walls and not enough bridges” – Isaac Newton”

“Academic psychology, while it is admirable and useful as a list of ingenious and important experiments, lacks intradisciplinary synthesis. In particular, not enough attention is given to lollapalooza effects coming from combinations of psychological tendancies. This is like rounding pi to an even three. It violates the injunction that everything should be made as simple as possible, but not simpler. In general, psychology is laid out and misunderstood as electromagnetism would now be misunderstood if physics had produced many brilliant experiments like Michael Faraday and no grand synthesizer like James Clerk Maxwell.
Second, there is truly horrible lack of synthesis blending psychology and other academic subjects. But only an interdisciplinary approach will correctly deal with reality – in academia as with the Coca-Cola company.”

“Not understanding elementary psychology well enough to avoid “new coke” – very bright people – is not satisfactory. These bad effects are a lollapalooza.”

“The correct strategies are clear after being related to the elementary academic ideas brought into play by the helpful notions.”

“Yeah. I’m passionate about wisdom. I’m passionate about accuracy and some kinds of curiosity. Perhaps I have some streak of generosity in my nature and a desire to serve values that transcend my brief life. But maybe I’m just here to show off. Who knows?”

“I believe in the discipline of mastering the best that other people have figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart…”

“There’s a lot of simple stuff that many of you are quite capable of learning. And your lives will work way better, too, if you do. Plus, learning it is a lot of fun. So I urge you to learn it. ”

“”Science cannot solve the ultimate mystery of nature. And that is because, in the last analysis, we ourselves are a part of the mystery that we are trying to solve” – Max Planck”

“”It is not the possession of truth, but the success which attends the seeking after it, that enriches the seeker and brings happiness to him.” – Max Planck”

“But, whatever you decide, I think it’s a huge mistake not to absorb the elementary worldly wisdom if you’re capable of doing it because it makes you better able to serve others, it makes you better able to serve yourself, and it makes life more fun. So if you have an aptitude for doing it, I think you’d be crazy not to. Your life will be enriched – not only financially, but in a host of other ways – if you do.”

“Giving rules like “Judges shouldn’t talk about legal issues that aren’t before them” without giving reasons is crazy.
The human mind is not constructed so that it works well without those reasons.
You’ve got to hang reality on a theoretical structure with reasons. That’s the way it hangs together in a usable form so that you’re an effective thinker.”
“And to teach doctrines – either with no reasons or with poorly explained reasons?! That’s wrong!”

“Many of the legal doctrines are tied to other doctrines. They’re joined at the hip. And, yet, they teach you those legal doctrines without pointing out how they’re tied to other important doctrines?! That’s insanity – absolute insanity.”

“Hard science and engineering tend to be pretty reliably done [in schools]. But the minute you get outside those areas, a certain amount of inanity seems to creep into academia – even [in] academia involving people with very high IQ’s.”

“The whole [law] school experience would be much more fun if the really basic ideas were integrated and pounded in with good examples for a month or so before you got into conventional [law] school material. I think the whole system of education would work better. But nobody has any interest in doing it.”

“If you’re like me, it’s kind of fun for it to be a little complicated. If you want it totally easy and laid out, maybe you should join some cult that claims to provide all the answers.”

“Everything should be made as simple as possible, but no more simple.”

“If there are 20 factors and they interact some, you’ll just have to learn to handle it – because that’s the way the world is. But you won’t find it that hard if you go at it Darwin-like, step by step with curious persistence. You’ll be amazed at how good you can get. ”

“To the extent you become a person who thinks correctly, you can add great value.”

“You have to know when to trust experts where you have no wisdom at all and when you override experts who may have incentive caused bias decisions.
In effect, you got to know what you know and what you don’t know. What could possibly be more useful in life than that?
When you don’t know and don’t have any special competence, don’t be afraid to say so.
Don’t screw up the hive and do a bee dance you have no knowledge of. Nobody expects you to know everything about everything. Confidently answering questions about which you don’t have any real knowledge is asinine.”

“What I’m against is being very confident and feeling that you know, for sure, that your particular intervention will do more good than harm, given that you’re dealing with highly complex systems wherein everything is interacting with everything else.”

“Each person has to play the game given his own marginal utility consideration and in a way that takes into account his own psychology.
So you have to adapt your strategy to your own nature and your own talents. I don’t think there’s a one-size-fits-all investment strategy that I can give you.
Mine works for me. But, in part, that’s because I’m good at taking losses. I can take em’ psychologically. And, besides, I have very few. That combination works fine.”

“You will make mistakes, but you can learn to make fewer of them than other people and fix your mistakes faster when you do make them. But there’s no way to live an adequate life without mistakes. The trick is to get so you can handle mistakes. Part of what you must learn is how to handle mistakes and new facts that change the odds. Life, in part, is like a poker game, wherein you have to learn to quit sometimes when holding a much loved hand.
The tendancy is to put in ‘just a little more’ – and people go broke this way by failing to stop, rethink, and say they can afford to write this one off and live to fight again and not pursue things with obsession in a way that will break you.”

“If you try and succeed at what you’re worst at, you’re going to have a very lousy career. Guaranteed. You have to figure out where your talents lie. And you’ll have to use your advantages. Why play a competitive game in a field where you have no advantage – maybe a disadvantage – instead of in a field where you have a clear advantage? The advantage of low tech stuff for us is that we think we understand it fairly well. The other stuff we don’t. And we’d rather deal with what we understand.”

“Have low expectations
Have a sense of humor
Surround yourself with the love of friends and family”

“Above all, live with change and adapt to it.”

“We look for no brainer decisions. We don’t leap over seven foot fences…we look for one foot fences with big rewards on the other side. Succeed by making the world easy for yourself, not by solving hard problems.”

“It doesn’t help us merely for favourable odds to exist. They have to be in a place you can recognize them. So it takes a mispriced opportunity that you’re smart enough to recognize. And that combination doesn’t occur often. BUT IT DOESN’T HAVE TO. If you wait for the big opportunity and have the courage and vigor to grasp it firmly when it arrives, how many do you need? Take the top ten business investments Berkshire’s ever made. We would be very rich if we’d never done anything else – in two lifetimes.
So, again, there isn’t any system for giving you perfect investment judgment on all subjects at all times. You have here, rather, a method you can use to sift reality to obtain an occasional opportunity for rational reaction.
If you take that method into something as competitive as common stock picking, you’re competing with many brilliant people. So, even with our method, we only get a few opportunities. Fortunately, that happens to be enough.”

The Multi Disciplinary Munger Discussion Notes
Math – compound interest, permutations/combination/decision tree theory, cost/benefit analysis
Accounting – limitations
Engineering – quality control, back up systems, breakpoints
Statistics – gaussian/normal distribution/bell shaped curve
Physics – critical mass

Biology/Psychology – why why why for compliance and giving why, perceptual apparatus and function and know it’s limitations, who is going to do what where when and why, rational and subconscious influences, pavlonian ie Paley, munger misjudgement list (reward/punishment incentives, liking/love-disliking/hating, doubt avoidance, inconsistency avoidance, curiosity, kantian fairness, envy/jealousy, reciprocation, influence from mere association, simple pain avoiding psychological denial, excessive self regard, overoptimism, deprival, social proof, contrast misreaction, stress influence, availability misweighing, authority misinfluence, reason respecting, drug misinfluence, use it or lose it, sensescence misinfluence, twaddle)

Microeconomics – ecosystem niche, advantages of scale (cost reductions along experience curve and more volume via incentives and more efficient output, geometry ie more volume per unit area of steel, advertising media usage capability, informational ie glotz gum, psychological social proof subconscious and conscious, overwhelming cascade winner take all dominance ie city newspaper, allowance for greater specialization vs big fat beaucracy, purchasing power thus lower merchandise cost and little labratories ie chainstores, patents/trademarks (ie trademark system well known big operation)/exclusive franchise (ie 1 of 3 stations with limited play or small monopoly of store inside airport), new capital flow through invested into lousy business that will kill or biz that will help and ‘stick to ribs’ idea ie for technology knowing when it helps and hinders, competitive destruction surfing

High quality businesses/Getting into better business for over long term (i.e 6% over 40 year paid cheaply or 18% return over 20 years paid a little more expensively … trick is getting into better businesses, and that involves all these advantages of scale you could consider momentum effects)
Circle of competence
Bet seldom, bet heavy
How find great companies? a. when small b. when big c. great managers (if had to choose bet on the business momentum, not the brilliance of the manager. But rarely you find a manager so good you’re wise to follow him into what looks like a mediocre business)
Frictional costs
Find a few, sit back and wait (large disaster can come from large investment too high priced but if you can find some fairly-priced great company and buy it and sit, that tends to work out very well)
Ultimate no brainer: UNDERPRICING … Untapped Pricing Power (growth stock model sub position [sub position of graham future earning power idea], with brilliant management is perfect …this model is like finding money in the street if you have the courage of your convictions)

Washington Post Dream Model: bought at about 20% of value to a private owner [graham style basis at 1/5th obvious value] and in addition faced ‘winner take all’ situation [you had both the top hand in a game that was clearly going to end up with one winner] and great management [lot of integrity and intelligence/high class people the Katharine Graham family which is why it was a damn dream]

Gillette/Coke Model: Low priced items and tremendous marketing advantage all over the world, and in gillettes case surfing simply technology hard for competitors to do [90% shaving market in whole countries]

GEICO model: Surgery formula – Mess to soundness to Liquidation if doesn’t pan out/Perfectly magnificent business submerged in a mess but still working/Easy to cut out foolishness to go back to perfectly wonderful business lying there

The Private Jay Abraham Checklist

September 7, 2008

1. Describe your position:
How long have you been at the company?
What was your previous position?

2. Describe your company as a person.
Personality traits:

3. Describe your company as a football team. Who plays each position?
General Manager:
Team Manager:

3 a. Corporate structure: The following section is to force you to think through the stucture of your organization. Fill in the boxes as appropriate. You may split the boxes to represent a different reporting structure, or create your own box, but this is an excellent exercise for an entrepreneur serious about building a bullet proof organization.

4. How do you explain your company to someone outside your industry (i.e. at a party), keeping it as simple as possible.
Now describe your company in one sentence.

5. How do you explain your company to someone in the industry (i.e. to a potential buyer
or client). This is the “Company pitch” NOT the product pitch (that next)


6. Describe the services you offer. This is the product/service pitch:

7. What does a client get when they buy your product/service?

8. What products/services do clients want that you do not offer?

9. Why must a prospect buy your product or service?
What would make it irresistible?

10. Describe your competition. (Use above criteria; Rate each on a scale from 1-10) on:
Competitor’s Name Product Sales Ability Marketing Ability Customer Service
Now rate your company:

11. Where do you see your industry in five years?

12. Where will your company be in five years? Chart year by year growth including the initiatives necessary to accomplish your goals. List financial goal and then the initiatives
Financial goal Initiatives to achieve it
Year one
Year two
Year three
Year four
Year five

Sales Activity/Rep Productivity: Use this as a way to measure, evaluate the person/people responsible for making sales:

13. Describe the typical sales cycle to close a sale, from generating the lead through to a close:
A) How many contacts to sell?
B) Description of typical clients.
C) Length of cycle from initial contact to close?
D) Number and type of competitors involved.
E) How many different people do you usually meet with to close a sale?

14. Describe the full effort to prospect (list every way you have of generating a prospect).

15. How many customers/clients do you have now in your database?

16. How many “dream” clients are there (the absolute most perfect clients, that 20% that would drive 80% of your sales)?
A) Of those, how many do you have now?
B) How many total potential clients altogether?

17. What are the most frequent objections you hear?

18. If you target 10 prospects, how many will you close? (Closing ratio)

19. What do you do with the prospects you don’t close?

20 How do your closing ratios fare against competitors?

21. How else does your customer get the product you supply?

22. Describe five of your most typical purchasers:

23. What are the top three reasons that you lose business to a competitor?

24. What are the top three reasons that a prospect would do nothing at the end of the sales cycle?

25. What is the follow-up with a client after they buy?

26. Do you ask for referrals, and how?

27. Describe the typical buying structure (what is your clients process to a decision? What are the factors that they will contend with; When and how does money come into the picture? What’s their buying criteria; The factors effecting a decision? And anything else involved in the decision process?):

28. With how many clients are you dealing with the top decision maker (not eh person who has to go to someone else to get approval, but the person who ultimately makes the decision (give percent%):

29. With how many of your clients do you have a strong relationship with top decision maker?

29 a) List three things you could do to strengthen your relationship?

30. How are salespeople compensated?

31. What are the standards for hiring salespeople?

32. What kind of training is currently being offered?
Sales training?

32 a. What would make the sales training excellent?
32 b. Product training?
32 c. What would make the product training excellent?

33. Account management training?
33 a. What would make the account management training excellent?

34. Time management training?

35. How often is training provided?

36. What are the procedures for training people?

37. What is the turnover rate for salespeople?

38. How often do you send clients interesting information that is not about your
product but could be relevant to them or their business?

39. How much outbound phone calling effort (to generate prospects) is made per day?
Average rep?
Best rep?

40. How many appointments set per day, week, month?
Average rep?
Best rep?

41. How many active outlets serviced at any given time?
Average rep?
Best rep?

42. How many prospects contacted per 100 efforts made?
Average rep?
Best rep?

43. How many letters sent out per day, week, month?
Average rep?
Best rep?

44. How many brochures distributed per day, week, month?
Average rep?
Best rep?

45. How many introductory presentations made per day, week, month?
Average rep?
Best rep?

46. How often is there follow-up with? Every day, week, month, year?
Average rep?
Best rep?

47. How often is your company in touch with clients as a corporate initiative, not something the depends on the mood or skills of an individual rep?

48. How many proposals per week/month?

49. Number of hot prospects at any given time (pipeline)?

50. Number of warm prospects?

51. Number of cold prospects?


52. Describe the company’s marketing philosophy.

53. What is the marketing theme or slogan?

54. What is the staff’s attitude toward marketing?

55. Marketing Weapons:
Do you buy advertising (if not describe what you COULD/MIGHT be doing)?
How often do you buy?
What sources do you use?
What is the theme of the campaign?
What do you want the campaign to accomplish?
Describe its effectiveness.
Do you have promotion pieces covering important sales points. If so how many?
What are some examples?
What promotion ideas do you have? Think of three themes right now that would make good headlines for promotional pieces that pitch/sell/persuade on one particular aspect of what you sell:

56. Do you have a PR effort? If so, what does it consist of?
Who is responsible for PR?
How does the press view your company?

57. Describe your direct-mail efforts?

58. Do you have a brochure/media kit?
How is it used?
What message is the brochure trying to communicate?

59. How do you educate your clients?
Do you provide seminars?
Attend trade shows?
Sponsor events?


60. How do clients perceive your industry?
How do clients perceive your company?
Your competitors?

61. Describe your most satisfied customer:
Describe your ideal client relationship?

62. Describe a situation where you were able to turn an unhappy client into a happy one.

63. What do clients say about your company?

64. What could you do/offer to make your clients say, “Wow”?

65. Do you have a database?
Profile (what are the factors by how you can sort)?

66. List your last five year’s sales – gross sales and approximate profits (pre-tax).
Last Year
Year before
Year before
Year before
Year before

67. Indicate all costs of sales.

68. List all overhead factors, showing breakdowns of what the overhead includes.

69. What are your year-to-date sales levels?

70. Where does most of your business come from (describe for each category below)?
a. Product or service (which products or services drive the most revenue?)
b. Category of customer (which category/type of customer drives the most revenue?)
b. Geography (Is there a particular region that is more fruitful?

71. Describe every successful advertising, selling or marketing program you have engaged in
for the last three years that has worked.
How many of these that have worked have you continued, and how many were more of a “one shot”

72. Do you have a marketing budget?
What is it?
How is it allocated?
How has it been used in the past?

73. What strategic alliances, if any, do you have or have you ever had?
How did they fare and how did they effect your business?

74. Who stands to gain more than you if you grow, i.e.., people who have products or
services that are purchased after your products or services arc purchased, or concurrent to
the purchase?

75. Who are your suppliers or other providers of products or services that benefit
massively when you are successful?

76. Describe all you know about your competitors:
Who arc the top three.

77. Where are they located?

78. What do they do best?

79. What do they do worst?

80. Describe as much as possible about their selling approaches, their selling strategies, their infrastructures, etc.

81. What products or services do people normally buy prior to, in conjunction with and right
after your product is purchased.

82. What are the goals of the owner:

83. Describe exactly who the owner or owners are.

84. What is the power structure? (For example, I owned a business but I was never there and
I deferred to my manager.) We want to know whether it’s hands on, hands off, who runs
things, what kind of turf or political environment we’re dealing with, who are the decision makers.

85. Who are the key people involved in the initiatives that will develop out of this PEQ process?

86. Explain, realistically, how much more business you can add without having to add any
more people, equipment, service or space.

87. Give an assessment of the transactional implication your product or service has in the end
-user’s life. In other words, if, because someone has your product or service, they save $400 a month forever on electricity, we want to know what that is. If you’re a real estate person and you put someone in a greater lifestyle and get them a house they can appreciate, list all the factors you think you impact when a sale is made.

88. What is the operating philosophy that the business has been built on?

89. What people, what books, what life factors have influenced and impacted the person who is answering this questionnaire.

90. What do you really want from your business? Do you want to become filthy rich? Do you want it to become a turnkey money machine? Do you want to position and maneuver it for ultimate sales? What are your goals?

91. Explain where all your time is being spent versus where it should be spent.

92. How much of your business comes from referrals?

93. Go through all 30 of the standard options in the “Three Ways to Grow a Business
Model” and tell us what you do. In other words, do you have a referral program? If the
answer is no explain why. If the answer is yes, describe how it works, what you do.
Include all the details. (See Attachment 1 – “3O Standard Options.”)

94 Describe your training, your interests, and your hobbies. What do you do when you’re
not at the office, and why?

95. Describe your family. Are you married? Are you divorced? How many children? How
is your health?

96. What is your greatest life achievement?

97. What one thing, more than anything else, do you want to accomplish in this business
before you get out?

98. Go through all 30 of the standard options in the “Three Ways to Grow a Business
Model” and tell us what you do. In other words, do you have a referral program? If the
answer is no explain why. If the answer is yes, describe how it works, what you do.
Include all the details. (See Attachment 1 – “3O Standard Options.”)



The number of clients can be increased by increasing the lead or inquiry generation, increasing the client retention rate, and by increasing the conversion from inquiry to sale. Please evaluate and improve your process in the below listed areas. So if you are not doing something in the given area, write what you could be doing o how you can improve what you are currently doing:

Increasing your lead or inquiry generation through:
1. Referral Systems
2. Acquiring Customers At Break-Even Up Front And Making A Profit On The “Back-End”
3. Guaranteeing Purchases Through Risk Reversal
4. Host-Beneficiary Relationships
5. Advertising
6. Using Direct Mail
7. Using Telemarketing
8. Running Special Events Or Information Nights
9. Acquiring Qualified Lists That More Effectively Target Your Prospect Increasing The Perceived Value Of Your Product/Service Through Better Client Education

Increasing your customer retention rate by:
1. Delivering Higher-Than-Expected Levels Of Service
2. Communicating Frequently With Your Customers To Nurture Them

Increasing your conversion from inquiry to sale by:
1. Increasing Sales Skill Levels Of Your Staff
2. Qualifying Leads Up Front
3. Making Irresistible Offers
4. Educating Your Clients By Giving Them The “Reasons Why”


To increase the average transaction value, you can focus on:
1. Improving Your Team’s Selling Techniques To Effectively Up-Sell And Cross-Sell
2. Using Point-Of-Sale Promotions
3. Packaging Complementary Products And Services Together
4. Increasing Your Pricing And Hence Your Margins
5. Changing The Profile Of Your Products Or Services To Be More “Up Market”
6. Offering Greater/Larger Units Of Purchase


To increase transaction frequency, you can focus on:
1. Developing A Back-End Of Products That You Can Go Back To Your Customers With
2. Communicating Personally With Your Customers (By Telephone, Letter, Etc.) To Maintain A Positive Relationship.
3. Endorsing Other People’s Products To Your Customer Base
4. Running Special Events Such As “Closed Door Sales”, Limited Pre-Releases, Etc.
5. Programming Customers
6. Price Inducements For Frequency


What initially got you started in your business? What motivation, occurrence, etc.?

When you first started, how did you attract your first customers (what process, method or action did you use)?

Why did customers originally buy from you?

Why do customers buy from you now?

What ongoing sales efforts do you personally perform today? What sales functions did you perform when you started your business?

What are you most proud of about your business, product or service?

If you had a magic wand, would you rather attract more new customers or garner more money from your existing customers, and why?

How have your methods for doing business, or the product(s) or service line(s) you market, changed since the inception of your business?

What is your vision for your business for the next:
6 months
1 year
3 – 5 years
10 years

What is your biggest opportunity to achieve this vision?

What is your greatest strength and is it consistent with this opportunity?

What is your greatest problem or weakness in achieving this vision and what’s the solution?

What are your sales per employee? Is that above, below, or equal to your industry average and what are the steps you are taking (or going to take) to improve it?

What’s the “lifetime value” of your typical customer (i.e. how much revenue will he/she generate for you over the entire period he/she does business with your company)?

What is the biggest customer complaint about your industry and how does your company address this problem?

Do you buy from your competitors to keep track of what they’re doing right and wrong?
Explain how these insights have helped you refine and better focus your overall business strategy.

Do you actively seek information from experts in your field and other fields related to yours? Explain:

When was the last time you introduced a new product or service to your market (both existing customers and prospects), how well did it work, and what was the reason?

What is your Unique Selling Proposition or USP (why do your customers buy from you – what is it about your product and/or service that distinguishes you from your competition)? You may have more than one for different product/service lines or segments of your business.

Is your USP a consistent theme in all of your marketing and sales efforts? If yes, how, and if no, why not?

How much of your time each month do you devote to marketing and how much will you devote in the future?

Do you have a marketing director? If so, describe his/her primary responsibilities and duties?

Do you provide incentive bonuses to your employees for creating new and better marketing methods for your company? Explain.

What’s your market potential (universe) and your current share of that market (%)?

What are the ways you have attained your existing customers (from best to worst)?

What does it cost you to get a new customer? (e.g. if you ran an advertisement that costs $1,000 and you attained two new customers it would be $500.)

What is the average sales and profits generated from a new customer in the first year and how is that information useful in your overall marketing strategy?

What is your biggest and best source of new business and are you doing everything possible to secure this business? If no, why not?

What has been your biggest marketing success to date (defined as a specific promotion, advertising campaign, telemarketing script etc.) and are you still using it or a version of it?

Do you have a systematic back-end (selling your own or others’ products to existing customers)? Describe how it works.

If you had as much money as you wanted, what would you do to improve your marketing (i.e. what is your biggest marketing problem or challenge today)?

If you had as much money as you wanted, what would you do to improve your product or service and what impact would that have on your customers?

Do you have a written marketing plan that you adhere to? If so, explain it.

Is the plan based on a fixed budget number (e.g. $1000 per month in the yellow pages), or is it a variable percentage of sales?

Why do customers buy from you? Do they buy from you exclusively or do they also patronize your competitors? What steps can you take to get the main portion of their business?

Do you have an adequate supply of customer testimonials and is there a system in place for their capture?

Are they written or taped, and how are they (or will they be) used in your marketing?
Do you actively solicit referral business? If so, how does it work and if not, why not?

Have you ever tried to reactivate your former customers and non-converted prospects? Explain.

Have you ever tried selling your non-converted prospects to your competitors? Explain.

Do you ever barter your products, services, or assets with other companies in exchange for their products, services or assets? If not, do you see barter possibilities in the future? Explain.

Do you use bonuses in all your sales/marketing propositions, and how did it affect the response?

Do you use risk-reversal in your marketing propositions? Explain its effectiveness:

What kind of guarantee or warranty do you give your customers and how does it compare with your competitors or with the industry at large?

How do you capture the names, addresses, and phone numbers of all your customers and prospects? Do you then use them in your marketing programs?

What is your selling season, if any, and are you actively looking to sell other complimentary products or services during the slower periods? If so, how do they interrelate?

How loyal are your customers? Is that normal, high, or low relative to your industry and what is the reason? How can it be improved?

The Eugene Schwartz Recipe

September 7, 2008

The Eugene Schwartz Recipe (Just Mix The Ingredients of Attention and Conviction)

Grabbing Attention
– Mass Desire That Creates The Market
– Awareness
– Sophistication
– Verbalization

Building Conviction
– Intensification
– Identification
– Gradualization
– Redefinition
– Mechanization
– Concentration
– Camouflage
– Verification
– Reinforcement
– Interweaving
– Sensitivity
– Momentum
– Mood

The Gary Bencivenga Weapons Tool Box

September 7, 2008

Gary Bencivenga On The Summary of All Sales In The Universe
1. Opening The Sale
2. Closing The Sale

The Gary Bencivenga Persuasion Equation
Urgent Problem +
Unique Promise +
Unquestionable Proof +
User-Friendly Proposition =

The Gary Bencivenga Proof Elements Checklist
1. Demonstration
2. The Creative Guarantee
3. Reason Why
4. Specifics
5. The Expose
6. Explain The Mechanism
7. Sell Against Type
8. Acknowledge Disbelief
9. Highly Believable Source
10. Testimonials
11. Candor

The Gary Bencivenga New Product Checklist
– Persuasion Equation
– Large / passionate / reachable
– Other hot products in the market
– Good margins
– Repeat business potential
– Ancillary sales potential
– Easily shippable
– Can we get an exclusive?
– can we get powerful built-in proof elements?

On Lists
Source, Offer, Recency, Frequency, Monetary Value, Cycles, Format, Universe, Affinity, Demographics, Usage, Response and Backend / Conversion Rate, Cost … Branding, Benefit/Experience, Format, Categorization, Yardstick lists for launch, Loyalty, Gender …

Gary Bencivenga on The Essence of Desire
Infinite and Never ending, Replaced as soon as filled, Hard to create but easy to amplify, Evolve from quantity to quality [be alert for the next subdivision]

The Gary Bencivenga Desire Checklist (w/ examples)
Recognition …(respect, fame, exclusivity, status, prestige, popularity)
Rejuvenation …(longevity, health, energy, fitness)
Relaxation … (fun, leisure, having the luxury of time do what you want)
Relief … (from share, pain, difficulty of any sort)
Religion … (built in set of belief, use the patron saints of their religion – for marketing use Ogilvy, use the assumptions the market has)
Revenge … (“remember those people who laughed at you and thought you would never make it, well now with our help you can show ‘em”)
Role Performance … (how to be better in your role, the best at what you want to be)
Romance … (travel, stimulation of any kind)

Wealth is an income stream…Repeat sales are the name of the game…Build wealth with royalties…

The Jeff Paul Copywriting Cheat Sheet

September 7, 2008

􀂉 Multiple headline ideas written down? Yes No N/A
􀂉 Do headlines reflect proper context? Yes No N/A
􀂉 Will offer be in headline? Yes No N/A
􀂉 Will guarantee be in headline? Yes No N/A
􀂉 Quotation marks around headline? Yes No N/A
􀂉 Is headline bolded? Yes No N/A
􀂉 Lead in headlines? Yes No N/A
􀂉 Follow on headlines? Yes No N/A
􀂉 Will story or stories be used in headlines? Yes No N/A
􀂉 Will testimonials be part of headlines or subheads? Yes No N/A
􀂉 Is strongest point(s) right up front at very beginning? Yes No N/A
􀂉 Have you used hidden benefit in headline and/or as theme? Yes No N/A
􀂉 Do you bring bullets out right away? Yes No N/A
􀂉 Do you have one or more Unique Selling Propositions offered/explained? Yes No N/A
􀂉 Is initial copy/script compelling enough to cause people to want to continue? Yes No N/A
􀂉 Is piece’s salutation personalized, or generic? (Dear Mr. Garcia vs. Dear Friend or Dear Golfer) Yes No N/A
􀂉 Is envelope handwritten/typed (no label) personal “A” pile mail? Yes No N/A
􀂉 Does your font look as much as possible like the publication you’re running in? Yes No N/A

􀂉 Is guarantee worded in an interesting way? Yes No N/A
􀂉 Length of guarantee? Yes No N/A
􀂉 Value of guarantee? Yes No N/A
􀂉 Are there multiple guarantees? Yes No N/A
􀂉 Unconditional guarantees? Yes No N/A
􀂉 Conditional guarantees? Yes No N/A
􀂉 Satisfaction guarantees? Yes No N/A
􀂉 Results guarantees? Yes No N/A
􀂉 More than money back guarantees? Yes No N/A
􀂉 Will shipping/handling be refunded? Yes No N/A
􀂉 Keep premiums after refunding? Yes No N/A
􀂉 Need authorization for refund? Yes No N/A
􀂉 (Seminars) Less than entire seminar, “after first day” type of guarantee? Yes No N/A
􀂉 No guarantee? Yes No N/A
􀂉 Any warranty? Yes No N/A
􀂉 Use up product still get refund type of guarantee? Yes No N/A
􀂉 Prorated refund for subscriptions type of guarantee? Yes No N/A
􀂉 Any guarantee for free info? Yes No N/A
􀂉 Is guarantee stated on order device or info? Yes No N/A

􀂉 Does order device (form) have a headline? Yes No N/A
􀂉 Does offer give people opportunity to exercise power of choice? (Basic vs. deluxe, etc.) Yes No N/A
􀂉 Is offer to buy or generate lead? Yes No N/A
􀂉 Is offer too confusing or complicated? Yes No N/A
􀂉 Does offer link product to American Dream, the big picture? Yes No N/A
􀂉 Does offer promise bigger, better, more? Yes No N/A
􀂉 Does offer present big ideas, big promises, big news, big pictures, big results? Yes No N/A
􀂉 Does offer promise improvement over previous versions or competition? Yes No N/A
􀂉 Does offer promise faster, more time, low time involved, instant results, or sell time? Yes No N/A
􀂉 Does offer promote that it’s NEW, or link to timely news events? Yes No N/A
􀂉 Are you offering installment payments? Yes No N/A
􀂉 Are you showing the price in the installment amounts, vs. full price? Yes No N/A
􀂉 Are you offering an incentive to pay all at once? Yes No N/A
􀂉 Do date deadlines have “hand-stamped” date stamped on order info? Yes No N/A
􀂉 Is shipping/handling added and marked up? Yes No N/A
􀂉 Is shipping/handling added to first installment? Yes No N/A
􀂉 Do you ask if shipping address is different from credit card address? Yes No N/A
􀂉 Does the offer compare price apples to oranges? Yes No N/A
􀂉 Does the offer break apart each component’s value/price and compare it to package savings? Yes No N/A
􀂉 Is offer clearly explained? Does it detail exactly what they’ll get? Yes No N/A
􀂉 Have you compared the offer to what they already are familiar with? Yes No N/A
􀂉 Have you chosen your price by first analyzing your costs and multiplying by factor? Yes No N/A
􀂉 Is price shown as odd ending number? Yes No N/A
􀂉 Have you thought through if price is at or above a resistance barrier, a break point? Yes No N/A
􀂉 Are you marking price up and/or discounting? Are you explaining why discount is available? Yes No N/A
􀂉 Are you offering 24 hour ordering? Yes No N/A
􀂉 Are you offering a discount for fax or e-mail orders? Yes No N/A
􀂉 Do you have an order form or coupon that restates the offer? Yes No N/A
􀂉 Does order form leave enough room to allow customer to write comfortably? Yes No N/A
􀂉 Are you collecting fax and e-mail info on order form or lead generation efforts? Yes No N/A
􀂉 Are you enclosing more than one order form with package? Yes No N/A
􀂉 Are all backs of order forms, whatever, filled with copy/graphics/testimonials, etc.? Yes No N/A
􀂉 Do you have a multiple year option for subscriptions, with incentives to do so? Yes No N/A
􀂉 Do you have any continuity offer for auto-charge? Yes No N/A
􀂉 Are you accepting checks by phone? Yes No N/A
􀂉 Is order form separate from rest of package? Yes No N/A
􀂉 Is there a reply envelope enclosed with package? Yes No N/A
􀂉 Is response device or devices key coded for tracking? Yes No N/A
􀂉 Are savings expressed in dollar amounts vs. percentage vs. units? (2 for 1, buy 1 get one free, etc.) Yes No N/A
􀂉 Is price explained in context of the entire offer and promotion? Yes No N/A
􀂉 Are immediate upsells/cross sells/upgrades offered at time of purchase? Yes No N/A
􀂉 Is guarantee rested in offer and ordering instructions? Yes No N/A
􀂉 Have you told them who to call, when to call, who to make out check to, how much, etc.? Yes No N/A
􀂉 Have you informed them of any sales taxes? Yes No N/A
􀂉 Is ordering info on every page of offer? Yes No N/A
􀂉 Is offer made with an endorsement and sent out that way? Yes No N/A
􀂉 Are recorded messages being utilized? Yes No N/A
􀂉 If using recorded message, do you have “toll-free, 24 hour recorded message” in copy? Yes No N/A
􀂉 Have you started or contemplated your follow up sequence of mail/fax/e-mail/phone follow up? Yes No N/A
􀂉 Does offer lend itself to offering samples and/or free trials? Yes No N/A
􀂉 What bonuses/premiums are being added to sweeten offer? Yes No N/A
􀂉 If you sell internationally, do you explain different shipping costs? Yes No N/A
􀂉 If you sell internationally, do you explain the types of currency you’ll accept? Yes No N/A
􀂉 Are you testing different colors and sizes for parts of a package? Yes No N/A
􀂉 Are you testing how package is inserted in envelope? (Loose, in center, paper clipped, etc.?) Yes No N/A
􀂉 Are postcards filled with headline(s), copy, testimonials, etc.? Yes No N/A
􀂉 Have you left room for address and bar code on bottom of envelope or postcard? Yes No N/A
􀂉 Are you using stage names on lead generation follow up pieces, so calls can be tracked? Yes No N/A
􀂉 Are you telling customer exactly what to do? (Call NOW, Pick up the phone, don’t delay, etc.) Yes No N/A

􀂉 Testimonials? Yes No N/A
􀂉 Who are you? Yes No N/A
􀂉 Why should anyone believe you? Yes No N/A
􀂉 Who says people should believe you? Yes No N/A
􀂉 Are you using a celebrity(s)? Yes No N/A
􀂉 Is your promise as big as possible without being unbelievable? Yes No N/A
􀂉 Do you have proof in the form of graphics? (Pictures, drawings, graphs, etc.) Yes No N/A
􀂉 Can you dramatize proof with before and afters? Yes No N/A
􀂉 Is your guarantee designed to alleviate skepticism? Yes No N/A
􀂉 Are you telling the whole story? Yes No N/A
􀂉 Is the deadline or limit reason explained? Yes No N/A
􀂉 Are you offering an alternative means of response? (Recorded message, web site, free info, etc.) Yes No N/A
􀂉 Can you demonstrate the results? Yes No N/A
􀂉 Are you using testimonials that relate specifically to this offer? Yes No N/A
􀂉 Are you showing the number of people who have bought? Yes No N/A
􀂉 Do you have proof like copy of patent, survey results, studies, etc.? Yes No N/A
􀂉 Do you have details that add to credibility? (Exact location, description of neighborhood, etc.) Yes No N/A
􀂉 Do you have any third party endorsements? (Articles, influential people, etc.) Yes No N/A
􀂉 Is promotion coming from a person rather than from a company? Yes No N/A
􀂉 Have you used one or more damaging admissions? Yes No N/A
􀂉 Have you acknowledged resistance with proactive objection handling, Q & A, etc.? Yes No N/A

􀂉 Does offer present any aspect of underdog trying to come out on top? Yes No N/A
􀂉 Has internal repetition of key points been used? Yes No N/A
􀂉 Does P.S. restate main benefit/theme/offer? Yes No N/A
􀂉 Are Subheads used throughout? Yes No N/A
􀂉 Any bullets? Yes No N/A
􀂉 Will bullets have reference to page number or actual part of product? Yes No N/A
􀂉 Do pages end with cliffhangers? Yes No N/A
􀂉 Do you use a boxed off coupon in ads, or have copy explain how to respond without a coupon? Yes No N/A
􀂉 Do coupons or order forms state YES!… and restate offer in first person? Yes No N/A
􀂉 Has copy been “mangled” with handwritten notes in margin, highlighting, etc.? Yes No N/A
􀂉 Is paragraph spacing and indenting done so readability is enhanced? Yes No N/A
􀂉 If advertisement, have you squeezed as much relevant, non-boring copy as possible? Yes No N/A
􀂉 Are testimonials prominently displayed and discussed? Yes No N/A
􀂉 Will testimonials be re-typed/edited or copies of actual letters/shots be used? Yes No N/A
􀂉 Will piece be explanatory without stories? Yes No N/A
􀂉 Are recorded messages part of enticement to respond or order? Yes No N/A
􀂉 Is copy strictly benefit driven, with the sole focus on the prospect/customer? Yes No N/A
􀂉 If features are mentioned, is every one backed with one or more benefits? Yes No N/A
􀂉 Is a complete story being told? Yes No N/A
􀂉 Does copy assume prospect/customer knows nothing? Yes No N/A
􀂉 Is copy written at about a sixth grade level? (No matter who prospect is.) Yes No N/A
􀂉 Does copy talk to one person at a time? Yes No N/A
􀂉 Does copy talk to a potential buyer and ignore non-interesteds? Yes No N/A
􀂉 Is copy laced with “lingo” that prospects/customers talk/think in? Yes No N/A
􀂉 Does copy give specific details without rounding off, or approximating? Yes No N/A
􀂉 Is copy written to sound like it’s being spoken? (Using words like “listen”, “a minute ago”, etc.) Yes No N/A
􀂉 Are all sentences/paragraphs short and super easy to read? Yes No N/A
􀂉 Are you using a serif font like “Times Roman”, etc. for body copy? Yes No N/A
􀂉 (Can use serif or sans serif for headlines)
􀂉 Have you read copy aloud before finalizing? Yes No N/A
􀂉 Does copy refer to any graphics? (Pictures, diagrams, graphs, etc.) Yes No N/A
􀂉 Do all graphics have captions that are tantalizing and/or reinforce other copy/graphics? Yes No N/A
􀂉 Does it pass the “who cares” test? Yes No N/A
􀂉 Does copy focus on prospect/client or on advertiser? (You/your vs. we/I test.) Yes No N/A
􀂉 Are you using any “grabber” like a dollar bill, Million dollar bill, foreign currency, condom, etc.? Yes No N/A
􀂉 Are number of pages divisible by four? Yes No N/A
􀂉 Are ads going to be fractional page, or 7×10 or larger? Yes No N/A
􀂉 Are you going to attempt to get upper right hand page, or be above fold? Yes No N/A
􀂉 Is copy big enough to read, and have you considered this especially if you market to seniors? Yes No N/A
􀂉 Are you using a “table of contents” as a form of bullet points? Yes No N/A
􀂉 Does copy make them feel empathy, and that they’re not alone anymore? Yes No N/A
􀂉 Is copy written for decision maker? Yes No N/A
􀂉 Does every separate piece in package have headlines? Yes No N/A
􀂉 Are you including a cover letter or lift letter? Yes No N/A

􀂉 Do bonuses have high perceived value? Yes No N/A
􀂉 Can you make bonuses by breaking out parts of product? Yes No N/A
􀂉 Are bonuses linked to main product? Yes No N/A
􀂉 Are you going to use non-linked bonuses? Yes No N/A
􀂉 Are bonuses set up to more desired than product? Yes No N/A
􀂉 Are you using bonuses to enhance purchase of upgraded (deluxe) product choice? Yes No N/A
􀂉 Are you creating or buying multiple bonuses, instead of just one? Yes No N/A
􀂉 Are you linking bonuses to fast response? (Time, ltd. qty., first x buyers, etc.) Yes No N/A
􀂉 Can they keep bonuses even if they refund? Yes No N/A
􀂉 Are you offering bonuses either at purchase or after to reduce refunds? Yes No N/A
􀂉 Are you offering unannounced bonuses either at purchase or after? Yes No N/A
􀂉 Are you offering installments as bonus? Yes No N/A
􀂉 Are you offering upsells that are promoted as bonuses? Yes No N/A
􀂉 Do you offer free or reduced cost shipping? Yes No N/A
􀂉 Do you offer special shipping for single payment when installments are offered? Yes No N/A
􀂉 Do you offer discounts or gift certificates or coupons? Yes No N/A
􀂉 Do you offer unlimited calling in, or use fax/e-mail help only? Yes No N/A
􀂉 Do you offer coupons for additional help? Yes No N/A

􀂉 Are you getting product to customer as fast as possible? Yes No N/A
􀂉 Are you delivering more than they thought they were buying? Yes No N/A
􀂉 If notebook type course, have you shrink-wrapped the contents? Yes No N/A
􀂉 Have you put a sticker on product telling them to call a recorded message before using? Yes No N/A
􀂉 Are you sending out a welcome letter? Yes No N/A
􀂉 Do you have a sequence of contacts after buying to help reduce refunds? Yes No N/A
􀂉 Do you call or send something like a $million letter before they get product? Yes No N/A
􀂉 Do you follow up with phone to see how they’re doing? Yes No N/A
􀂉 Do you offer stuff they can only get after the guarantee period is over? Yes No N/A
􀂉 Do you get feedback from refunders as to why, and develop changes based on this? Yes No N/A
􀂉 Do you survey customers and offer bribes for responding to get feedback? Yes No N/A
􀂉 Do you put tons of testimonials in any form/media in with product? Yes No N/A
􀂉 Do you have a stick letter outlining all the reasons they might return, and why they shouldn’t? Yes No N/A
􀂉 Do you use audio, videos, recorded messages or web sites filled with testimonials after purchase? Yes No N/A
􀂉 Do you offer contests or rewards for sticking with program? Yes No N/A
􀂉 Do you offer recognition for people who stick with it? Yes No N/A
􀂉 Do you offer some sort of assistance or help lines, via e-mail, phone, fax, recorded message, etc.? Yes No N/A
􀂉 Do you offer a newsletter or other communication at least monthly? Yes No N/A
􀂉 Do you offer conference calls or other meetings with users and satisfied testimonials? Yes No N/A
􀂉 Do you offer frequent buyer awards? (Points worth $ or merch., one free for x bought, etc.) Yes No N/A
􀂉 Is your shipping container “refund friendly” (too easy), or as self-destructing as possible? Yes No N/A

􀂉 Do you offer rewards for referrals? (Cash, gift cert., frequent buyer points, etc.?) Yes No N/A
􀂉 Do you offer recognition for people who refer to you? Yes No N/A
􀂉 Do you ask for referrals in writing, in person, etc.? Yes No N/A
􀂉 Do you have a referral list people can check out? Yes No N/A

􀂉 Have you chosen list carefully per your desires for right customers for your offer? Yes No N/A
􀂉 Have you segmented lists to weed out wrong types? Yes No N/A
􀂉 Have you segmented your own list for different offers? Yes No N/A
􀂉 Are you offering more products/services of yours for sale? Yes No N/A
􀂉 Are you offering more products/services of others for sale? Yes No N/A
􀂉 Are you targeting decision makers? Yes No N/A
􀂉 Are you surveying your own customers for feedback and ideas? Yes No N/A
􀂉 Are you offering your products/services to other people’s lists? Yes No N/A
􀂉 Are you communicating regularly with your customers? Yes No N/A
􀂉 If yes to above, is the communication in the “voice” of the owner/front person? Yes No N/A
􀂉 Are you aggressively seeking testimonials? Yes No N/A
􀂉 Are you getting testimonials in writing with permission to use them in writing? Yes No N/A
􀂉 Do you send out a new customer welcome kit of some kind? Yes No N/A
􀂉 Do you acknowledge customer’s purchases? Yes No N/A
􀂉 Is every delivery of product/service accompanied by more offers? Yes No N/A
􀂉 Is your monthly communication dated and timely, or numbered sequence that doesn’t change? Yes No N/A
􀂉 Are you offering back end stuff the same way they came in initially? (e.g. ad/long form report) Yes No N/A