Chit Chat Stocks – The Complete Investment Checklist with John Rotonti

Podcast: Chit Chat Stocks
Hosts: Ryan Henderson, Brett Shafer
Guest: John Rotonti (Bastion Fiduciary)
Date Recorded: October 9, 2025
Release Date: November 5, 2025

Episode Overview

This episode features John Rotonti, portfolio manager at Bastion Fiduciary and recurrent guest, for an in-depth evergreen discussion about constructing and applying an investment checklist. John unpacks the philosophy, structure, and practical use of checklists in his research and portfolio management, offering actionable insights and real-world examples. The conversation covers the necessity for process and flexibility in investing, the evolution of checklists, using themes to spot inflection points (like AI and infrastructure), and how portfolio adds, trims, and sells are managed.

Key Discussion Points & Insights

1. Why Use an Investing Checklist?

[01:45] John Rotonti

• Process & Discipline: Checklists enforce discipline, rigor, and repeatability—"the reps" of investing.
  • "Checklists help to ensure a level of discipline and rigor and hopefully repeatability into the stock picking process." [01:53]
• Humility & Risk Control: They keep investors humble and help avoid overconfidence.
• Mental Aid: John uses checklists because he can’t keep all possible factors in his head at once.
  • "I'm not Buffett, I'm not Druck, I'm not Tepper... I use tools and aids to help me increase the odds of a good outcome. And a checklist is one of those tools." [03:05]
• Forces Slower (Better) Decision-making: Slowing down may not always maximize short-term gains, but improves long-term client outcomes.

2. How to Build and Use a Checklist

[06:57] John Rotonti

• Structure:
  • Original checklist published 5 years ago had 10 core questions with many sub-questions.
  • Evolved now to be more flexible and adapted to each business.
• Not every item applies equally: The checklist is a living document—questions are weighted differently depending on the company.
  • "Investors need to keep their checklists fungible... focus on different questions based on different opportunities." [07:49]
• Key Initial Questions:
  • What is the value proposition? What problems does the company solve?
  • How did the business reach its current state? What challenges did it overcome?
  • Key industry inflection points, innovations, or secular trends that matter.
  • Competitive environment, creation of shareholder value, barriers to entry, and moat durability.
  • Sources of growth (organic/acquisitive) and reinvestment opportunities.
  • Management capability, transparency, and incentives.
  • What stands out as unique or hard to replicate about the business?
• Ongoing (‘Maintenance’) Checklist:
  • Did the moat widen or narrow this year?
  • Did management act as owners?
  • Are products/services still relevant and offering good value?
  • How did management respond to downturns?
  • Will per-share value likely be higher in five years?
  • Is valuation still reasonable?
  • Any new risks or opportunities, and do I understand their financial impact?

3. Flexibility & Practical Usage

[13:55] John Rotonti

• The process has shifted from written to mostly “mental repository.”
• Research duration: If unfamiliar, process can take from a week up to a month, depending on complexity and access to management.
  • "It could take me anywhere from a week to a month." [14:47]
• Gaps in knowledge trigger more research, reaching out to network, or management.

Notable Quotes & Memorable Moments

• "For me, the checklists are the reps." – John Rotonti [01:54]
• "Slowing down has not always resulted in positive investing outcomes for me personally. I do think, though, that slowing down will benefit my clients in the long run." – [03:28]
• On investing flexibility: "Have your questions but be flexible and basically just read, read, read and ask those questions along the way." [18:32]

The Messiness & Exceptions of Investing

• Checklist ≠ Rigid Process: Checklists should guide, not dictate. Some core “boxes” may go unchecked for the right reasons.
  • Example 1: Investing in recently spun-off business with limited operating history because of a strong outlook for margins and returns.
  • Example 2: Owning a railroad with lower ROIC spread but a “moat as solid as I’ve ever studied.”
  • "Those are two examples when I've overridden the checklist." [21:31]

Thematic Investing & AI as a Generational Inflection

[23:56] – [33:12]

• Idea Genesis: Rotonti developed his infrastructure/investment theme in response to post-COVID supply chain failures and underinvestment.
  • He cites Marc Andreessen’s "It’s Time to Build" essay [2020] as a key influence.
• Investment Horizon: Focus on duration of per-share growth, not just rate.
• Importance of Durable Themes: Looks for “long duration” generational themes (AI, infrastructure) but stresses that boom-bust cycles are inevitable.
• Bubble or Revolution?:
  • Quotes Jeff Bezos: “AI is going to change every industry. In fact, it's a very unusual technology in that regard. It's a horizontal enabling layer... I literally mean every company.” [33:12]

Valuation’s Role in the Checklist

[37:16] John Rotonti

• Constant Consideration: Valuation is not the last step—it’s re-evaluated throughout due diligence.
  • "I'm a business analyst... but it's constantly and simultaneously thinking about valuation at the same time." [39:59]
• Watchlist System: Only allows himself to buy stocks that have passed the full checklist—often preparing to be opportunistic during market dislocations.
  • "If you had not researched it beforehand, you can go, well, some people thought it was a high quality business... but I don’t really know it. Let me start researching—then the opportunity goes away. But if you had researched it beforehand... this is the one time to strike." – Brett Shafer [41:17]

The One Checklist Question That Trumps All

[42:18] John Rotonti

• Minimum Standards: Solid balance sheet, profitability, and profitable growth are non-negotiables.
• Most Critical: Value proposition and customer obsessiveness—this underpins long-term business durability.
  • Case Study: Quanta Services (PWR)
    • CEO proactively solved supply chain bottlenecks and transformed the business model, enhancing customer value.

Portfolio Management, Adds, Trims, Sells

[48:32] John Rotonti

• Low Turnover Preference: Originally launched with 32 stocks, quickly reduced to 26 after recognizing weaker conviction in the bottom holdings.
  • "32 was too many for me... my long-term conviction around those last five or six stocks... was substantially lower than for the core 25 or 26." [49:06]
• Adds: Typically occurs when a high-conviction holding drops sharply—willing to back up the truck.
  • Admits he’s not as good at "adding on the way up."
• Trims: Valuation-driven—he’ll trim when prices run too far ahead of value, letting the position “earn” a larger share again over time.
• Sells: Primarily for long-term business quality deterioration, management breaches of trust, or if he realizes he’s wrong.
  • "If I question the long-term, you know, quality of the business, I’ll probably just sell out in that case." [52:59]
  • Case Study: Old Dominion Freight Line – Maintains position despite short-term pain due to fundamental understanding of the freight recession and business resilience.

Listener Q&A Highlights

On Reaching Out to Management

• Be Relentless:
  • "Sometimes I just fatigue them and they finally say look, we got to talk to this guy honestly." [17:24]
• Best Practice: Write to IR, leverage direct emails if possible, mention portfolio ownership for credibility.

Final Takeaways & Messages

• Checklists = Rigor + Flexibility:
  • Start with questions, seek deep understanding—not just checkboxes.
  • Customize for every business; expect investing to be a little “messy.”
• Preparation Pays:
  • By having thoroughly researched companies on a watchlist, you’re ready to strike when markets offer up rare opportunities.
• Customer Value Above All:
  • If a company deeply delights its customers, its long-term prospects are much improved.
• Portfolio Management is About Opportunity Cost:
  • Always ask: Is my new idea better than my lowest-conviction holding?
  • Be ready to let go of positions when conviction or quality wanes—don’t let inertia guide you.

Parting Quote

"I'm just grateful that y' all had me on the show. I always appreciate the questions, the discussion... As you know, it's like my favorite. It is my favorite and so keep doing the great work and thank you all." – John Rotonti [60:18]

Timestamps for Key Segments

• Why Use a Checklist: 01:45 – 06:13
• Building a Checklist: 06:57 – 12:47
• Checklist Flexibility & Application: 13:55 – 19:20
• Overriding the Checklist—Examples: 19:20 – 23:30
• Themes & Inflection Points (AI, Infrastructure): 23:56 – 33:12
• AI: Bubble vs. Revolution & End Markets: 33:12 – 36:36
• Valuation in the Checklist: 37:16 – 41:17
• Most Important Checklist Question & Case Study: 42:18 – 47:49
• Portfolio Management (Adds, Trims, Sells): 48:32 – 59:53
• Listener Q&A/Farewell: 59:53 – 60:35

For more on John Rotonti’s checklist, newsletter, and portfolio, see links in the episode show notes.