Before investing, I profile whether and how this investment fits my style. Beyond the regular research items regarding a company (John Rotonti has a good one I like) I've learned that I specifically need to focus on the below to ensure quality trades that fit my personal style and possible pitfalls:
Competitive advantage / moats / durability of the advantages: How strong are the moats that the company has? How material are those moats to the businesses success and long term value and growth? How durable are the moats? Are these moats getting stronger over time or weaker?
Is this a top notch management who can execute? What's their track record? Do they have skin in the game? What's their incentive plan and how does that affect key success metrics?
Why invest now? What's the time horizon for this investment?
What's the upside? Is there an exit price or exit metric? What is it? What is the end game for this investment?
How is the market pricing this? Is this a contrarian bet or not?
How confident am I in all these answers?
Risk factors and how to mitigate them:
Bad management? » Tighter risk management, more homework and research, less leeway.
Contrarian bet? » Where do I admit I'm wrong? How long or what do I need to see play out or not?
Volatility? » Larger steps between purchases (more percentage difference or time)
Confidence low? » wider buy steps over time, more patience, less capital at risk
How big can this position reach? Is this a resilient position? If it’s fragile, how much can it affect my portfolio and overall returns?
Based on all of the above: what's the capital allocation summary for this investment? What's the starting position size and when will I increase it and by how much?
Answering these questions help me mitigate the weak spots in my investment style and amplify my strong suits.