What is typically an essential part of due diligence before investing?

Due diligence is a critical process in the investment decision-making framework, and confirming material facts and financials is a fundamental aspect of this process. It involves thoroughly investigating the financial health, operational capabilities, and market position of a company before making any investment. This includes reviewing financial statements, audits, revenue streams, and other essential documents that provide insight into the company's performance and potential for future growth.

By verifying these material facts, investors can better understand the risks associated with the investment and make informed decisions based on comprehensive data rather than assumptions or incomplete information. This step is vital to mitigate risks and identify any red flags that could impact the investment's success.

In contrast, relying on hearsay, focusing on past performance without current context, or analyzing a company's success without thorough research might lead to uninformed choices, ultimately jeopardizing the investment. Thus, confirming material facts and financials ensures a rigorous evaluation process consistently yields better investment outcomes.