First Principles of Master Investing

Who this guide is for

A synthesis volume for the practitioner who wants the underlying framework, not another stock-picking newsletter. Built for the CFO sitting across the table from a capital-allocation decision, the allocator sizing a concentrated position, the founder thinking about durable compounding inside the business they built, and the serious DIY investor who has read the canon and wants the distilled reference.

You are…	What you get
CFO evaluating capital allocation	The Outsiders CEOs as the template: how Singleton (Teledyne), Murphy (Capital Cities), Graham (Washington Post), and Malone (TCI) ran capital allocation as the primary job. Buybacks done right vs. done wrong. The Berkshire model of float as a capital-allocation engine.
Allocator sizing a concentrated position	Concentration discipline (Munger, Li Lu). Margin of safety. Intrinsic value walks — reverse-DCF as the sanity check. Fisher’s 15 questions adapted for modern diligence. Lollapalooza biases.
Founder thinking about durable compounding	Owner-mindset capital allocation. Reinvestment vs. dividend vs. buyback vs. tuck-in. Berkshire’s float as a thesis founders can study. 3G/AmBev/AB InBev as the Brazilian playbook for ZBB and operating discipline.
Serious DIY investor	The synthesis you wanted after reading Buffett’s letters, Poor Charlie’s Almanack, The Outsiders, and Common Stocks and Uncommon Profits. The framework underneath all four.
International reader	The case studies travel: BYD (China), 3G (Brazil), sogo shosha (Japan), Li Lu’s cross-border practice. Religious / ethical overlay parity covered in the international applicability front matter (Christian, Jewish, Islamic / Sharia, Buddhist, Confucian, Hindu).

8 parts plus appendices (international applicability, voices from global practice, glossary, index, Excel workbook map). Page counts approximate.

PART I · The Owner’s Mindset

1What "First Principles" Means in Investingp1

2Owner-Mindset Capital Allocation (Buffett’s Frame)p9

3Circle of Competence — and How to Expand It Honestlyp17

PART II · Intrinsic Value & Margin of Safety

4Intrinsic Value: What It Is, What It Isn’t (Apple, Coca-Cola, BNSF walks)p25

5Reverse-DCF as the Sanity Check (Cisco March 2000)p37

6Margin of Safety — Graham’s Original, Buffett’s Refinementp45

7The IBM / Sears / GE Triangulation (D&A vs. CapEx, OCF vs. FCF)p53

PART III · The Outsiders CEOs

8Henry Singleton at Teledyne — the Year-by-Year Share Count Walkp63

9Tom Murphy at Capital Cities; Katharine Graham at the Postp71

10John Malone at TCI — The Tax-Aware Compounderp79

11Buybacks Done Right: Teledyne, Apple FY2018–FY2025, BYDp87

PART IV · Concentration & Conviction

12Munger’s Lollapalooza — the Six Biases Compoundedp97

13Concentration Discipline (Munger, Li Lu)p105

14Fisher’s 15 Questions — Adapted for Modern Diligencep113

PART V · Float, Insurance, and the Berkshire Model

15Insurance Float as a Capital-Allocation Enginep123

16Berkshire’s Succession Bench (2026 Update)p131

PART VI · International First Principles

17BYD / Wang Chuanfu / Li Lu — The China Walkp139

183G / AmBev / AB InBev — The Brazilian Outsider Playbookp147

19Buffett’s Japanese Sogo Shosha Positionp155

PART VII · Mistakes & Special Situations

20When the Discipline Fails — Wells Fargo (asset cap lifted June 2025)p163

21Ackman’s COVID CDS — Tail Hedge as First Principlesp171

PART VIII · Operating Under These Principles

22The Annual Review You Owe Yourself (Buffett’s Format)p179

23Author’s Note — "The first principles travel. The case studies change."p187

Appendices

AInternational Applicability & Religious/Ethical Overlay Parityp189

BVoices from Global Practice (distributed in chapters; index here)p191

CComprehensive Glossaryp192

DIndex of Names & Cases with Page Referencesp193

EWorkbook Map (5 sheets — reverse-DCF, multi-year IV walk, share-count walk, buyback decision, concentration sizing)p194

What’s actually in the bundle

1. The synthesis volume (PDF)

8 parts plus appendices. Searchable, hyperlinked TOC and index. Every chapter pairs the principle with at least one named case study; most include a "show the math" intrinsic-value walk. International voices distributed throughout. Single-user license.

2. The companion Excel workbook (XLSX)

Five practitioner-grade sheets: reverse-DCF sanity check, multi-year intrinsic-value walk (Apple template), year-by-year share-count walk (Teledyne template), buyback-vs-dividend-vs-reinvestment decision, concentration sizing with Kelly-aware downside math. Branded, formatted in thousands, right-justified numerics. The same tools the guide teaches with.

3. International applicability front matter

A short up-front section makes the case that these principles travel: Christian, Jewish, Islamic / Sharia, Buddhist, Confucian, Hindu frames all recognize the same underlying ideas (patience, prudence, stewardship, compounding). The case studies span China, Brazil, Japan, the US, the UK, and Israel. Built for international use on day one.

Plus: Free live tools derived from this guide

Free interactive tools at tools.baratelliinstitute.com run the math from the guide on your scenario. No purchase required.

DCF Sanity Check (Founder’s DCF) WACC Calculator Business Valuation Stock Buyback Educator

Editorial provenance

This guide has gone through chapter-by-chapter committee review, a citations + liability audit, a valuation-panel pre-review of the intrinsic-value walks (with post-correction reasonableness check), a mentor-tone + quote-safety sweep, and a citations pass on every quote and dollar figure. Updates through 2025 are folded in: Apple FY2024 + FY2025 buyback totals, Snap 2024+2025, BNSF + Coca-Cola through 2025, BYD through the 2024 trim cycle, Wells Fargo asset-cap lift (June 2025), Berkshire succession bench update.

Every issue flagged in review has been folded into the text. The guide is in final pre-launch polish; publishing on the same shelf as the rest of the library.

About the author

Philip A. Baratelli — Founder, Baratelli Institute. Ponte Vedra Beach, Florida.

The First Principles guide is a synthesis volume: the principles belong to Buffett, Munger, the Outsiders CEOs, Fisher, Li Lu, the 3G partners, and the Japanese sogo shosha tradition. The reference is what those first principles look like when you sit down to apply them on a Tuesday morning.