Charlie Munger always uses 4 criteria to buy stocks.
It allows him to make good and rational investment decisions.
Let's dig into them:
It allows him to make good and rational investment decisions.
Let's dig into them:
Here are the 4 criteria of Charlie Munger:
1️⃣ The business must have a moat
2️⃣ You need to be able to understand the business model
3️⃣ Management must have talent and high integrity
4️⃣ There should be a margin of safety
1️⃣ The business must have a moat
2️⃣ You need to be able to understand the business model
3️⃣ Management must have talent and high integrity
4️⃣ There should be a margin of safety
1️⃣ The business must have a moat
A sustainable competitive advantage is crucial.
Seek for companies with a high and consistent gross margin as well as ROIC.
A sustainable competitive advantage is crucial.
Seek for companies with a high and consistent gross margin as well as ROIC.
2️⃣ You need to be able to understand the business model
Only invest within your circle of competence.
It will allow you to make better investment decisions.
Only invest within your circle of competence.
It will allow you to make better investment decisions.
3️⃣ Management must have talent and high integrity
You want to invest alongside with people you trust.
You as an investor and management are partners in crime.
You want to invest alongside with people you trust.
You as an investor and management are partners in crime.
4️⃣ There should be a margin of safety
Buy wonderful businesses at a fair price.
A margin of safety provides you with protection against unforeseen circumstances.
Buy wonderful businesses at a fair price.
A margin of safety provides you with protection against unforeseen circumstances.
That's it for today.
If you liked this, you'll love our website.
▪️ Each Tuesday we share 5 investment insights
▪️ Each Thursday we publish a deeper investment article
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If you liked this, you'll love our website.
▪️ Each Tuesday we share 5 investment insights
▪️ Each Thursday we publish a deeper investment article
Start your journey here:
qualitycompounding.substack.com
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