Constructing the Buffett Investment System

This flowchart illustrates the construction of the "Buffett Investment System," detailing a complete closed-loop process that spans from an investor's self-awareness to practical execution and subsequent reflection. The system operates in a top-down manner: it begins with personal attributes and the "circle of competence," integrates investment philosophy to define criteria for high-quality assets, and uses these to structure the investment portfolio. It then moves to the operational phase, employing search strategies to identify investment targets (what to buy) and execution strategies to determine entry timing and position sizing, followed by ongoing monitoring during the holding period. Finally, the system addresses exit strategies (when to take profits or cut losses) and incorporates a feedback loop regarding "how to view mistakes"—designed to handle system failures or errors in judgment—thereby reflecting a process of continuous iteration and refinement.