Wiki Wiki Web

The author J Dennis Jean-Jacques is very admirative of Warren Buffet.

Seven fundamental beliefs are:

  • the world is not coming to an end despite what markets fears are
  • investors are always driven by fear and greed, volatility is a cost of doing business
  • inflation is the true enemy, macro predictions are a waste of time
  • good ideas are hard to find but there are always good ones, even in a bear market
  • the primary purpose of a public traded company is to convert company resources into shareholder value, make sure this happens
  • 90% of succesful investing is buying right. Value investors tend to sell early
  • volatility is not risk, it is opportunity

five keys to an investing framework

  • is this a good business run by smart people?
  • what is this company worth?
  • how attractive is the price for this company and what should I pay for it?
  • how realistic is the most effective catalyst?
  • what is my margin of safety at my purchase price?

Understanding the business

Annual report

Few sections of the annual report:

  • Picture presentations: highlights by the company
  • Letter to shareholders:
  • MD&A (mgt discussion and analysis)
  • Financial Statements
  • Footnotes
  • Other information


  • Description of company business
  • Performance of the stock, finances, and changes in the last 5 years
  • Board members and company officers, compensation
  • Exhibits, financial statements

Other forms

  • 8K form reports material changes 15 days before they occur
  • Proxy Statements: issued to provide information to shareholder before they vote on company matters


The other 5 key principle severely lack span and orthogonality compared to the 12 principles enumerated in The Warren Buffet Way

For completeness, other advice given by Munger would be

  1. Measure risk: All investment evaluations should begin by measuring risk, especially reputational.
  2. Be independent: Only in fairy tales are emperors told they're naked.
  3. Prepare ahead: The only way to win is to work, work, work, and hope to have a few insights.
  4. Have intellectual humility: Acknowledging what you don't know is the dawning of wisdom.
  5. Analyze rigorously: Use effective checklists to minimize errors and omissions.
  6. Allocate assets wisely: Proper allocation of capital is an investor's No. 1 job.
  7. Have patience: Resist the natural human bias to act.
  8. Be decisive: When proper circumstances present themselves, act with decisiveness and conviction.
  9. Be ready for change: Accept unremovable complexity.
  10. Stay focused: Keep it simple and remember what you set out to do.