The Four Filters Invention of Warren Buffett and Charlie Munger
Product Description”The Four Filters Invention of Warren Buffett and Charlie Munger” examines each of the basic steps they perform in “framing and making” an investment decision. This book is a focused look into this amazing invention within “Behavioral Finance. ” The genius of Buffett and Munger’s parsimonious four filters process was to “capture all the important stakeholders” in a “multi-variable” equation or formula. Imagine. . . Products, Enduring Customers, Managers, and Margin-of-Safety. . . all in one mixed “qual + quant” formula. Other important ideas are embedded in each chapter. The book can be used as a supplemental textbook in a Valuation or Decision Sciences course.
The Four Filters Invention of Warren Buffett and Charlie Munger
November 10th, 2009 at 1:45 am
Great Book! A great source of information. Very well thought through and easy to understand. I would recommend this book to everyone
Rating: 4 / 5
November 10th, 2009 at 2:57 am
The next best thing to getting stock suggestions from Warren Buffett is to understand the thinking process he and Charlie Munger use to make their investment decisions at Berkshire Hathaway. The Four Filters condenses an incredible amount of information on the Buffett and Munger thinking process into a very readable and understandable format. The Filters are essentially a checklist of criteria which are used at Berkshire Hathaway to sort through thousands and thousands of available investment options and then hone in and analyze the remaining candidates in more detail. If you’d like to think like Buffett and Munger, this well-crafted treatise will certainly help you.
Rating: 5 / 5
November 10th, 2009 at 3:32 am
Very insightful! More than I expected. A must read for both neophytes and experienced investors. A great guidebook that I will refer to for years to come. A clear and concise explanation of the 4 filters to successful investment.
Rating: 5 / 5
November 10th, 2009 at 4:40 am
Lots of books have been written on Warren Buffet and Charlie Munger. The merit of this small book of only 130 pages is that it concentrates on the essence of the analysis of these exeptionnal investors. It is an absolute must read for the capitalist who wants to minimize losses and maximize profits. I highly recommend this book. Bernard Pirenne
Rating: 4 / 5
November 10th, 2009 at 7:12 am
Warren Buffett has said that investing is simple but not easy. But what does he mean by this? Mr. Labitan answers this question by doing a superb job in identifying and articulating the unique philosophy and methodology of two of the greatest investors in history. This philosophy and methodology for successful investing is what Mr. Labitan refers to as, “The Four Filters Invention of Warren Buffett and Charlie Munger,” which he persuasively argues is innovative, effective, and underappreciated by the academic community. Additionally, he believes it is likely not clearly defined and recognized as a supremely important stock screening and selection tool in the minds of even ardent Buffett and Munger fans. These four filters include:
1) Recognizing excellent companies which have an uncomplicated business model with superior products or services (Understandable first-class businesses).
2) Possessing a long-term sustainable competitive advantage (generally in the areas of supply, demand, or economies of scale).
3) With capable, candid, shareholder-oriented, and honest management.
4) Purchased with a “Margin of Safety,” by buying only at a bargain price (buying the stock when the total market capitalization of the company is significantly less than a reasonable estimation of the intrinsic value of the company). Intrinsic value is defined as, “the disounted value of the cash that can be taken out of a business over its remaining life. ” Mr. Labitan details the process of determining intrinsic value on a per share basis using Kraft as an example company.
I have read this book twice now, and in doing so have recognized many valuable nuggets of wisdom. This book also does an excellent job of incorporating and synthesizing a vast ocean of writings (from multiple authors whom Buffett and Munger admire) into important key concepts and specific methods for improving the likelihood of becoming a more successful investor. I highly recommend reading this wonderful book.
Rating: 5 / 5