The most important attribute for success in value investing is patience, patience, and more patience. The majority of investors do not possess this characteristic.

I suspect that my thinking is an eclectic mix, not pure net-net because I couldn’t do it anyway so you have to have a new something to hang your hat on. But the framework stays the same.

The company must be profitable. Preferably it will have increased its earnings for the past five years and there will have been no deficits over that period.

I bought stuff at 3.5 cents once and I thought it can’t go down to zero. It can.

I think that intelligent forecasting (company revenues, earnings, etc.) should not seek to predict what will in fact happen in the future. Its purpose ought to be to illuminate the road, to point out obstacles and potential pitfalls and so assist management to tailor events and to bend them in a desired direction. Forecasting should be used as a device to put both problems and opportunities into perspective. It is a management tool, but it can never be a substitute for strategy, nor should it ever be used as the primary basis for portfolio investment decisions.

The difference between the price we pay for a stock and its liquidation value gives us a margin of safety. This kind of investing is one of the most effective ways of achieving good long term results.

We always look at the margin of safety in the balance sheet and then worry about the business.