What Are the Six Gates in the Investment-Checklist Skill?

The six gates in the investment-checklist skill are Ability Circle, Good Business, Moat Depth, Management Trustworthiness, Price/Margin of Safety, and Position Discipline—forming a systematic filter to eliminate poor investment opportunities before deeper analysis.

The ai-berkshire repository codifies Warren Buffett’s value-investing principles into reproducible, code-based workflows. The six gates in the investment-checklist skill defined in skills/investment-checklist.md enforce a "filter-first" methodology that prioritizes risk avoidance over upside hunting, requiring analysts to pass distinct qualitative and quantitative checkpoints before allocating capital.

The Six-Gate Framework Overview

Each gate acts as a hard filter designed to identify "no-go" decisions early. According to the source code in skills/investment-checklist.md, a company must pass every gate—or at least not trigger a hard-stop—to proceed to comprehensive valuation. The framework mirrors Buffett’s first rule: never lose money.

Gate-by-Gate Breakdown

First Gate – Ability Circle (Lines 48–62)

First Gate – Ability Circle asks: Can I understand the business? This qualitative screen evaluates whether the analyst can articulate the company’s operations, long-term business model, and key value drivers. It distinguishes between deep industry knowledge and surface-level research, ensuring the investor stays within their circle of competence. If the business model cannot be clearly explained, the checklist triggers an immediate stop.

Second Gate – Good Business (Lines 67–90)

Second Gate – Good Business asks: Is it a good business? This gate relies on quantitative economic traits to assess quality. The skill analyzes metrics including ROE, gross margin, free cash flow, capital-expenditure intensity, and debt levels. Companies with inconsistent profitability or high maintenance capex requirements typically fail this quantitative screen.

Third Gate – Moat Depth (Lines 93–112)

Third Gate – Moat Depth asks: Does the company have a sustainable competitive advantage? The checklist evaluates specific moat elements: brand strength, switching costs, network effects, cost/scale advantages, and technology or patent barriers. It also applies a "copy-competitor" test—if a rival could replicate the business easily, the moat is deemed shallow, and the gate rejects the opportunity.

Fourth Gate – Management Trustworthiness (Lines 116–132)

Fourth Gate – Management Trustworthiness asks: Are the people trustworthy and competent? This governance review examines management honesty, historical capital-allocation decisions, shareholder alignment, ownership mindset, and corporate governance standards. A critical sub-check assesses survivability without the CEO—if the business depends on a single charismatic leader, the gate flags elevated key-person risk.

Fifth Gate – Price / Margin of Safety (Lines 136–161)

Fifth Gate – Price / Margin of Safety asks: Is the price sufficiently cheap? Leveraging utilities from tools/financial_rigor.py, this gate compares valuation multiples—including PE, forward-PE, PB, dividend yield, and FCF yield—against historical percentiles. It also runs multi-scenario valuation models to quantify the margin of safety, ensuring the purchase price includes a buffer against estimation errors or adverse market movements.

Sixth Gate – Position & Discipline (Lines 165–171)

Sixth Gate – Position & Discipline asks: Can I stay disciplined and control emotions? This behavioral filter screens for red flags such as FOMO, herd-following tendencies, or inability to tolerate a prolonged trading suspension. The gate requires a concise 200-word investment thesis that articulates the specific catalyst and risk controls, forcing the analyst to document conviction levels before execution.

Running the Investment-Checklist Skill

You can invoke the six-gate analysis from the command line as a Python module. The skill accepts tickers as arguments, resolves them in parallel, and generates a markdown report containing separate six-gate tables for each company:

# Example: run the checklist for Apple (AAPL) and Tencent (0700.HK)

python3 -m skills.investment-checklist "AAPL, 腾讯"

The command executes three phases: parsing arguments and resolving tickers, spinning up parallel agents to fetch gate-specific data, and producing a markdown report with an overall comparison table when multiple tickers are supplied.

For programmatic integration, import the underlying function directly:

from skills.investment_checklist import run_checklist

# Returns a dict with gate scores and a markdown report

result = run_checklist(["AAPL", "NVDA"])
print(result["markdown_report"])

Summary

• Ability Circle ensures you understand the business model deeply.
• Good Business validates economic quality through ROE, margins, and cash flow.
• Moat Depth confirms sustainable competitive advantages via the copy-competitor test.
• Management Trustworthiness verifies governance quality and capital allocation.
• Price / Margin of Safety quantifies cheapness using multi-scenario valuation.
• Position & Discipline enforces emotional control with a mandatory 200-word thesis.

Frequently Asked Questions

What is the investment-checklist skill in ai-berkshire?

The investment-checklist skill is a codified slash-command (compatible with Claude-Code and Codex) that automates pre-investment due diligence. It encapsulates the six-gate framework defined in skills/investment-checklist.md into a reusable script that fetches data, scores each gate, and outputs a structured markdown report.

How does the six-gate framework prevent investment losses?

The framework enforces sequential filters that identify risks before capital commitment. By requiring passage of gates covering Ability Circle, Moat Depth, and Management Trustworthiness before reaching valuation, it eliminates emotionally driven purchases and businesses outside the analyst’s competence, directly applying Buffett’s principle to avoid permanent capital impairment.

What valuation metrics does Gate 5 (Price/Margin of Safety) analyze?

Gate 5 evaluates PE, forward-PE, PB, dividend yield, and FCF yield against historical percentiles. It utilizes functions from tools/financial_rigor.py to run multi-scenario models that calculate the discount to intrinsic value, ensuring the entry price provides a quantitative buffer against downside scenarios.

Can I customize the six gates for my own investment strategy?

Yes. The gate definitions reside in skills/investment-checklist.md, and you can modify the scoring criteria or line ranges (e.g., lines 48–62 for the Ability Circle) to align with your specific investment philosophy. After editing, run scripts/sync-codex-skills.py to regenerate the Codex-compatible artifact and update the skill responses.

{
  "mcpServers": {
    "instagit": {
      "command": "npx",
      "args": ["-y", "instagit@latest"]
    }
  }
}