Invested: The Rule #1 Investing Podcast

Warren Buffett said, “Be certain,” and here’s how you’re going to be certain. If you buy a wonderful business at an attractive price, you’re certain to make money. It’s essentially like buying a $10 dollar bill for five bucks. You focus on a couple of key things to make sure you know what you’re getting. So, what is a wonderful business?  A wonderful business is understandable, and we’re passionate about it. We call that the meaning of the business. It’s durable, we call that the moat. Like the water around a castle protects it from attack.  The CEO is honest, passionate, and owner-oriented, and we call that management. Those are the first three M’s. We make sure that we understand all three M’s before we go forward, then we look at the price. Ben Graham, who taught Warren Buffett how to do this said, “The three most important words in investing are margin of safety”. The margin of safety is a measure of how “on sale” a company’s stock price is compared to the true value of the company. You need to be a