Focus on return on equity, not earnings per share.

It is easier to rationalize than it is to be rational.

We want to use cash. The reason we haven't used our cash two years ago, we just didn't find things that were that attractive. But when people talk about cash being king, it's not king if it just sits there and never does anything. There are times when cash buys more than other times, and this is one of the other times when it buys a fair amount more, so we use it.

In the business world, the rearview mirror is always clearer than the windshield.

SUPPOSE that an investor you admire and trust comes to you with an investment idea. This is a good one, he says enthusiastically. I'm in it, and I think you should be, too.

Shares are not mere pieces of paper. They represent part ownership of a business. So, when contemplating an investment, think like a prospective owner.

The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.