Charlie Munger: I only look at three criteria when selecting stocks based on 10 times profit, but 99% of people misunderstand and essentially solve one problem. Munger said: True investment is very simple, just three questions: Do things have value? Can the value be sustained? Is the current price reasonable? If you can understand these three questions, you are a qualified investor. It doesn't require you to have much money, what is needed is whether you are willing to think and learn. I'm trying to explain: Does something have value The products of this enterprise must be in demand, indispensable, and have long-term stickiness. It is foreseeable that they will not go bankrupt for ten, twenty, or even longer, and have a longevity gene. For example, Bamang's cola, chewing gum, razors, chocolate, railways, energy, banking, insurance, and so on, all of which may seem boring and unremarkable, but their longevity and popularity are inseparable. This is qualitative. Can the value be sustained? It's about whether there are longevity genes. Just like how we cannot do without petroleum and petrochemical products, coal, electricity, and food and drink, we can start from our surroundings. Because it cannot be separated and seems irreplaceable, it can still create value. Is the price reasonable? Munger has always emphasized that what they mean by reasonable prices is not like the price of cigarette butt stocks, but it is also not something that can be bought at any price as long as the company is good. No, the reasonable price they emphasize is lower than the intrinsic value, and they only buy at a discount of 60% or 70%. In our opinion, it must be a price that even the best company can recoup its principal within ten years, coupled with a certain level of growth potential and the power of double clicking. This belongs to the quantitative part, and you can refer to data such as PE, PB, ROE, gross profit margin, net profit margin, cash reserves, debt ratio, and so on. I remember Buffett saying that everything that makes me make big money is qualitative, meaning that holding good companies for a long time makes him make big money, and cigarette butt stocks are all picked up, smoked, and then thrown away. Munger transformed Buffett from an ape to a human. Opportunities for good companies are not often used, so investments need to wait. Waiting for a good price, waiting for a good opportunity. Opportunities may not always come, but they do. It's a question of whether you dare to buy heavily when the opportunity arises. Melamine milk, plasticizer and Baijiu stipulated in the eight regulations, banks under the collapse of real estate, depressed insurance, ass hide glue hide boiled water, the depression of the general environment, and so on. It seems that their sky is going to collapse, dare you buy it? That's when it tests whether you have researched the enterprise deeply enough and whether you have confidence in the future of the industry. The fact shows that most people flee upon hearing the wind, otherwise the stock price would not have gone crazy. It's difficult to wake up alone when everyone is drunk. Look at the long-term, look at the future prospects, and then look down to see if the stock price is at its bottom. Munger didn't say that being rich once in life is enough! Yes, choose a good company, buy at a low price, hold for the long term, reinvest with dividends, become wealthy, and inherit.