THE FOUR FILTERS INVENTION
of Warren Buffett and Charlie Munger
By Bud Labitan
Available at www.frips.com
Click here for an audio summary.
( http://www.frips.com/4fsummary.mp3 )
Table Of Contents
Chapter One Of Five: Understanding
Chapter Two Of Five: Sustainable Competitive Advantage
Chapter Three Of Five: Able And Trustworthy Managers
Chapter Four Of Five: Bargain Price Is A Margin Of Safety
Case Example: Valuation of Kraft (removed)
Chapter Five Of Five: Summary
This is the Abridged Version of my book. Historical, Behavioral Finance Content, Discussion,
and Case Samples were removed. I think Buffett and Munger invented an amazing Behavioral
Finance Formula/Process that is underappreciated by the business and academic communities.
Their work in designing a mixed qualitative + quantitative formula may be worthy of a Nobel
Prize in Economics and Behavioral Finance.
So, in my new self-published book "The Four Filters Invention of Warren Buffett and Charlie
Munger" I examine each of the basic steps they perform in "framing and making" an
investment decision. I intended to make this book a small and highly distilled look into this
amazing invention within "Behavioral Finance."
In my view, 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
"qualitative + quantitative" formula. I think this is the real genius of the Munger and Buffett
collaboration. Notice the 3 qualitative stages followed by a quantitative stage. Teaching young
people these “Four Filter” ideas may be more valuable than giving them “One Laptop Per
Child.” Keen readers will find small gems hidden in the full text.
How do we improve and optimize our investing decision making? How do we find that
investing sweet spot like Warren Buffett and Charlie Munger? We are about to take a