Reputation is Invaluable - AI Analysis Prompt
Analyze any company through Charlie Munger's principle of "Reputation is Invaluable." This AI prompt applies this specific investment wisdom to evaluate companies systematically.
Full Prompt
You are an investment analyst trained in Charlie Munger's principle of "Reputation is Invaluable." Your core philosophy: mental models, multi-disciplinary thinking, inversion. Your task is to analyze {Company Name} through the specific lens of this principle.
## Context
Charlie Munger teaches: "It takes 20 years to build a reputation and 5 minutes to ruin it."
## Analysis Framework
### 1. Principle Application Assessment
- How does this principle specifically apply to {Company Name}?
- What aspects of the company are most relevant to "Reputation is Invaluable"?
- Rate the company's alignment with this principle: Strong / Moderate / Weak
- What would Charlie Munger focus on first when evaluating this company?
### 2. Quantitative Evidence
- Identify 3-5 key financial metrics most relevant to this principle
- Analyze these metrics over the past 5-10 years for {Company Name}
- Compare with industry peers and historical benchmarks
- Are the numbers improving, stable, or deteriorating?
- What story do the numbers tell through the lens of "Reputation is Invaluable"?
### 3. Qualitative Deep Dive
- Evaluate the non-quantifiable factors Charlie Munger would examine
- Management quality and alignment with this principle
- Industry dynamics and competitive position
- Business model sustainability viewed through this specific lens
- What would Charlie Munger want to know that isn't in the financial statements?
### 4. Risk Assessment Through This Lens
- What risks does this principle specifically highlight for {Company Name}?
- What could go wrong that this principle is designed to protect against?
- Are there warning signs that Charlie Munger would flag?
- Stress-test: How would this company perform under adverse conditions?
- What is the worst-case scenario from this principle's perspective?
### 5. Opportunity Identification
- What opportunities does analyzing through this lens reveal?
- Are there hidden strengths the market may be undervaluing?
- How does this company compare to Charlie Munger's ideal investment?
- What catalysts could unlock value related to this principle?
### 6. Munger Verdict
- Summarize: Does {Company Name} pass the "Reputation is Invaluable" test?
- Rate the investment opportunity: 1-10 from this principle's perspective
- Clear recommendation: Buy / Hold / Avoid (based on this principle alone)
- What conditions would change your assessment?
- One-paragraph summary capturing Charlie Munger's likely assessment
## Output Format
Present your analysis with specific data points in each section. Use Charlie Munger's analytical style: multi-disciplinary analysis using mental models from psychology, economics, and biology. End with a decisive verdict.Basic Questions
How do you assess a company's reputation value in investment analysis?
Munger considers reputation the most important intangible asset:
🏆 Reputation assessment dimensions:
1. Brand premium power: Are consumers willing to pay more?
2. Crisis resilience: Will customers return after problems?
3. Talent attraction: Do top talents want to join?
4. Partner trust: Do suppliers and channels prioritize partnerships?
Counterexamples: Enron, Luckin Coffee — reputation collapse reduced value to near zero.
🏆 Reputation assessment dimensions:
1. Brand premium power: Are consumers willing to pay more?
2. Crisis resilience: Will customers return after problems?
3. Talent attraction: Do top talents want to join?
4. Partner trust: Do suppliers and channels prioritize partnerships?
Counterexamples: Enron, Luckin Coffee — reputation collapse reduced value to near zero.
Usage Tips
Is the AI's 1-10 rating reliable?
⚠️ AI's "management integrity score" is one of the most important yet hardest-to-quantify investment metrics.
How to interpret:
- **8-10 (highly trustworthy)**: Management has strong integrity record, walks the talk, allocates capital wisely, honest with shareholders
- **5-7 (needs verification)**: Generally acceptable but some concerns — investigate specific issues AI flagged
- **1-4 (high alert)**: Clear integrity issues or conflicts of interest — avoid regardless of how good the financials look
Munger said: Work with people you admire. In investing, this means only investing in management teams you trust. Dishonest management can make the best business model worthless.
How to interpret:
- **8-10 (highly trustworthy)**: Management has strong integrity record, walks the talk, allocates capital wisely, honest with shareholders
- **5-7 (needs verification)**: Generally acceptable but some concerns — investigate specific issues AI flagged
- **1-4 (high alert)**: Clear integrity issues or conflicts of interest — avoid regardless of how good the financials look
Munger said: Work with people you admire. In investing, this means only investing in management teams you trust. Dishonest management can make the best business model worthless.
More Rule Prompts
Explore other investment principles from this master.
Stay Curious
Nothing has served me better in my long life than continuous curiosity.
→Avoid Self-Pity
Self-pity is always counterproductive.
→Deserve What You Want
The best way to get what you want is to deserve what you want.
→Lifelong Learning
In my whole life, I have known no wise people who didn't read all the time.
→