Warren Buffett has said that investing is simple but not easy. But what does he mean by this? Mr. Labitan answers this question by doing a superb job in identifying and articulating the unique philosophy and methodology of two of the greatest investors in history. This philosophy and methodology for successful investing is what Mr. Labitan refers to as, "The Four Filters Invention of Warren Buffett and Charlie Munger," which he persuasively argues is innovative, effective, and underappreciated by the academic community. Additionally, he believes it is likely not clearly defined and recognized as a supremely important stock screening and selection tool in the minds of even ardent Buffett and Munger fans.

These four filters include:

1) Recognizing excellent companies which have an uncomplicated business model with superior products or services (Understandable first-class businesses).

2) Possessing a long-term sustainable competitive advantage (generally in the areas of supply, demand, or economies of scale).

3) With capable, candid, shareholder-oriented, and honest management.

4) Purchased with a "Margin of Safety," by buying only at a bargain price (buying the stock when the total market capitalization of the company is significantly less than a reasonable estimation of the intrinsic value of the company).

Intrinsic value is defined as, "the disounted value of the cash that can be taken out of a business over its remaining life." Mr. Labitan details the process of determining intrinsic value on a per share basis using Kraft as an example company.

I have read this book twice now, and in doing so have recognized many valuable nuggets of wisdom. This book also does an excellent job of incorporating and synthesizing a vast ocean of writings (from multiple authors whom Buffett and Munger admire) into important key concepts and specific methods for improving the likelihood of becoming a more successful investor. I highly recommend reading this wonderful book.