The Four Filters Invention of Warren Buffett and Charlie Munger abridged
Released on: March 20, 2008, 8:11 am
Press Release Author: Bud Labitan
Industry: Financial
Press Release Summary: Book Preview: \"The Four Filters Invention of Warren Buffett and Charlie Munger.\" Abridged Version.
Press Release Body: A Book Preview is available here: www.frips.com/4fab.pdf
\"The Four Filters Invention of Warren Buffett and Charlie Munger.\" Abridged Version.
As significant as the refinement of the microscope by Antonie van Leeuwenhoek, I believe that Warren Buffett and Charlie Munger invented an investing formula that is underappreciated by the business and academic communities. In my view, the Four Filters developed by Warren E. Buffett and Charles T. Munger is an amazing intellectual achievement in both practical and Behavioral Finance. The Four Filters are a remarkable and important set of steps used by the world's greatest investors. The Four Filters function as an effective time-tested focusing formula for investing success. They serve as a very useful guide for assessing intrinsic value and sensible price.
Behavioral Finance and Common Sense have shown us that we all have human tendencies to frame ideas that are affected by our emotions. Ideally, we would use the best of our emotional and intellectual energies in the right way. In my view, the Four Filters reduce the risk of investment failure by helping us steer a better path to a quality bargain.
Charlie Munger has spoken about the merits of having a "pilot's checklist." This is something I did not appreciate until I studied the Four Filters. These days, Warren Buffett mentions the Four Filters this way: "Charlie and I look for companies that have a) a business we understand; b) favorable long-term economics; c) able and trustworthy management; and d) a sensible price tag." These Four Filters can enhance the probability of our investment success. I think they will help you in your search for intrinsic value and sensible investment.
The Four Filters Formula is remarkably effective in maximizing profit and preventing loss. It is an elegant algorithm that combines the use of important qualitative and quantitative decision steps. The author predicts that it will someday be recognized as a major contribution to the field of Behavioral Finance.
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