[00:00] You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome the emotions by looking at the numbers. Your path to financial freedom starts now.

[00:36] All right, folks, welcome to investing for beginners podcast. This is episode 81 tonight. We’re going to do something different for us tonight. We’re going to play you an audio clip and then we’re going to talk a little bit about it. So Andrew and I have talked a lot about how we choose companies, where we find her ideas and things of that nature. And tonight I thought we would go back and show you the original source where we’ve gotten our ideas from and so I’m going to have you listened to an audio clip from Charlie Munger and he’s going to talk about is four filters for choosing an investment.

[01:09] We have to deal with things that we’re capable of understanding and then once we’re over that filter we have to have a business with some intrinsic characteristics that give it a durable competitive advantage and then of course we would vastly prefer a management in place with a lot of integrity and talent and finally, no matter how wonderful it is, it’s not worth an infinite price. So we have to have a price that makes sense and gives a margin of safety considering the natural vicissitudes of life. It’s a very simple set of ideas and the reason that our ideas have not spread faster is there to sample the professional classes, can’t justify their existence if that’s all I have to say. I mean it’s also obvious and so simple. What would they have to do with the rest of the semester?

[02:14] Alright. So that was fascinating. Very interesting guy to listen to. Super smart and a little cranky. So it’s kind of fun at the end. They enter an hour chuckling about that earlier. It’s kind of comical, but. So Charlie being Charlie, so I thought we would break it down and talk a little bit about the different filters there and we can talk a little bit about those ideas and give you guys a little bit better idea of how to find companies to invest in. So filter number one, filter number one, it’s going to be develop an understanding of the business. Andrew, why don’t you chat a little bit about that and I’ll throw my two cents in on that.

[02:55] Yeah, sure. So when I think about business, I think it should always be very, very simple. Business in general, uh, has a purpose. I think it gets lost a lot, especially in the stock market. People think I want to own this business, I want to buy it, I want to buy a piece of it and I want to sell it. Lay there for a higher price. And I think that’s so backwards. I think you buy a business because you want the profits from it. You want this business to make profits and you want to keep some of those profits and that...