Invest in businesses "The basic ideas of investing are to look at stocks as businesses, use market fluctuations to your advantage and seek a margin of safety. That's what Ben Graham taught us… A hundred years from now they will still be the cornerstones of investing."
Circle of Competence "Draw a circle around the businesses you understand and then eliminate those that fail to qualify on the basis of value, good management, and limited exposure to hard times."
Return on equity "The primary test of managerial economic performance is the achievement of high earnings rate on equity capital employed."
Quality of management "We do not wish to join with managers who lack admirable qualities, no matter how attractive the prospects of their business. We've never succeeded in making a good deal with a bad person."
Return "We love owning common stocks - if they can be purchased at attractive prices. Unless, however, we see a very high probability of at least 10% pre-tax returns, we will sit on the sidelines.
Margin of safety "You have to have the knowledge to enable you to make a very general estimate about the value of the underlying business. But you do not cut it close. That is what Ben Graham meant by having a margin of safety. You don't try and buy businesses worth $83 million for $80 million. You leave your self an enormous margin."
Economic moat "Look for the durability of the franchise. The most important thing for me is figuring out how big a moat there is around a business. What I love, of course, is a big castle and a big moat with piranhas and crocodiles."