First-principles investing
Evaluate every investment by understanding the underlying business rather than following market trends. Buffett reads financial statements like a detective, ignoring hype and focusing on durable value.
Steps
Choose a company or asset and read its financial statements from scratch
Calculate the intrinsic value based on earnings, assets, and growth — ignore the stock price
Ask: would I buy this entire business at this price if I could never sell it?
Identify the company's moat — what makes it hard for competitors to replicate?
Only invest when the price is significantly below your calculated intrinsic value
Practitioners
Related Systemsin Money & Wealth
5/25 Rule
List your top 25 goals, circle the top 5, and avoid the other 20 at all costs. Warren Buffett's ruthless prioritization system for focus and wealth building.
Daily Financial Reading
Spend 5-6 hours every day reading financial reports, newspapers, and industry analysis. Warren Buffett's lifelong habit that compounds knowledge into investment edge.
Lean In
Proactively take on leadership roles, speak up in meetings, and advocate for yourself. Sheryl Sandberg's framework for career advancement and closing the ambition gap.
Annual letter writing
Write a candid yearly letter summarizing your results, mistakes, and thinking. Warren Buffett's annual shareholder letters force clarity of thought and build trust through radical transparency.