Tenets of the Warren Buffett Way

Business Tenets
- Is the business simple and understandable?
- Does the business have a consistent operating history?
- Does the business have favorable long-term prospects?

Management Tenets
- Is management rational?
- Is management candid with its shareholders?
- Does management resist the institutional imperative?

Financial Tenets
- Focus on return on equity, not earning per share.
- Calculate "owner earnings"
- Look for companies with high profit margins.
- For every dollar retained, make sure the company has created at least one dollar of market value.

Market Tenets
- What is the value of the business?
- Can the business be purchased at a significant discount to its value?