Business Tenets:
-
Is the business simple and understandable?
-
Does the business have a consistent operating history?
-
Does the business have favorable long-term prospects?
Management Tenets:
-
Is management rational?
-
Is management candid with its shareholders?
-
Does management resist the institutional imperative?
Financial Tenets:
-
Focus on return on equity, not earnings per share
-
Calculate “owner earnings”
-
Look for companies with high profit margins
-
For every dollar retained, make sure the company has created [or can create] at least one dollar of market value
Market Tenets:
-
What is the value of the business?
-
Can the business be purchased at a significant discount from its value?
Finally Buffett – Is it a good Investment?
