Invested: The Rule #1 Investing Podcast

“Spend each day trying to be a little wiser than you were when you woke up.” — Charlie Munger That assertion is so powerful, but it’s easy to overlook how critical it is. The whole idea of Rule #1 Investing is researching and learning about companies that you love, and buying stocks at attractive prices. Part of researching a company is ensuring it has a margin of safety, good management, meaning to you, and lastly, a moat — or competitive advantage. Let’s focus on moat, for example. Charlie Munger loves Coca-Cola. He said that “Coca-Cola is the perfect business because it has this gigantic durable competitive advantage, or moat, which gives it predictable cash flow.” This allows us to figure out what the future cash flow will be and value the company today, so we know whether we can buy it on sale or not. Your job as an investor is to research industries you already understand, so you can recognize companies with strong moats. An example of a brand moat is Harley-Davidson’s notorious lifestyle branding. T