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 business ideas are embedded in
each chapter. The book can be used as a
supplemental textbook in a Valuation or Decision
Understanding the Business, Sustainable
Competitive Advantage, and Able Trustworthy
Managers, are probably more important in the
valuation of a business. Many people rush to the
stated earnings numbers without looking at the
"free cash flow" available. This
Intrinsic Value Estimator uses the estimated Free
Cash Flow in a 2-stage Discounted Cash Flow Model
( years 10 and 15 ), to arrive at an estimate of
generates an estimated yield on holding a quality
bargain purchase for 10 years.