Bud Labitan

Voices Of Calm In the Maelstrom

Your mention of "voices of calm and hope" grabbed my attention. Someone said that the mark of leadership is to define reality and provide hope. And, you are correct to point out that the market prices of potential investments are approaching or going below "intrinsic value." Readers here may also enjoy "The Four Filters Invention of Warren Buffett and Charlie Munger" book. It explains and honors the intellectual partnership of two brilliant men. The genius of Buffett and Munger's four filters innovation was to "capture all the important stakeholders" in one "multi-variable" four step process. www.amazon.com/dp/0615...

It would be interesting to hear what Charlie Munger thinks of this tumultuous period in the markets. Here is a new example of the "four filter clusters" I found in Warren Buffett's latest talk with Charlie Rose on 10/01/08.

Charlie Rose: Is there an operative narrative to the kinds of investments you are making other than you look at and you buy on value, look at advantage, management, you look at a place that can absorbed the amount of money you want to invest, and you look at its prospects, and you look at price.

Warren Buffett: Yeah. They have to be pretty good size for us now to have... to move the needle. But we look for fairly large situations.
We look for things I can understand. A lot of businesses I don't understand. So some guy may know how to make money in cocoa beans, but I don't so I just let him have that. But it's got to be something I understand. It's got to be a business with fundamentally good economics. It's got to be a management that I like and trust and admire. And it's got to be a price that makes sense. And lately the price --

Charlie Rose: Prices make sense.

Warren Buffett: Prices make a lot more sense now, yeah.

How do the concepts line up? With slightly different words, like this:
1. Understandable => "things I can understand"
2. Sust.Comp.Advantage => "fundamentally good economics"
3. Able n Trustworthy Managers => "a management that I like and trust and admire"
4. Bargain Price => "it's got to be a price that makes sense"

So, you and Buffett are in agreement: You want to be greedy when others are fearful. You want to be fearful when others are greedy.
Where are the other voices of calm, hope, and sensible valuation?
Hopefully, one of the candidates will step up to the plate tonight in the second Presidential debate.