Tuesday, 9th November 2010

Warren Buffett’s Business Evaluation Filters

Written by George Traganidas Topics: Stock Investing, Wealth Building

At a press conference in 2001, when Warren Buffett was asked how he evaluated new business ideas, he said he used 4 criteria as filters.

  • Can I understand it (Is it predictable. Do I have a reasonable probability of being able to assess where the business will be in 10 years)?
  • Does it look like it has some kind of sustainable competitive advantage?
  • Is the management composed of able and honest people?
  • Is the price right?

He uses the above filters in the given order and only looks at the next filter if it passes the current one.

Follow the practical way,
George Traganidas

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