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.

When a stock doubles, sell half - then what you have is a free position. Then it becomes more of an art form. When you sell depends on individual circumstances.

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.

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

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.

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

All we try to do is buy a dollar for 40 cents.