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.

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.

If it is cheap enough, we don't care what it is.

Try to pick a fund manager who has a well-defined strategy, has been through these things before, and go invest and stay with him.

Just as many smart people fail in the investment business as stupid ones. Intellectually active people are particularly attracted to elegant concepts, which can have the effect of distracting them from the simpler, more fundamental truths.

Protect the downside. Worry about the margin of safety.