Why will someone sell you a dollar for 50 cents? Because in the short run, people are irrational on both the optimistic and pessimistic side.

There will be losing years; but if the art of making money is not to lose it, then there should not be substantial losses.

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

The company must be paying dividends. Preferably the dividend will have been increasing and have been paid for some time.

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.

In every analysis you need to isolate what the real assets are and you must not forget to examine the franchise to do business, to review the character and competence of the management and to estimate the outcome if the whole business had to be turned into cash.

The price must be less than one half of the former high and preferably at or near its all time low.