Buffet’s Tenets of Investing:
Buffet’s Business Tenets for Investing:
1. Is the business simple and understandable?
2. Does the business have an identifiable consumer monopoly or franchise product?
3. Does the business have a consistent operating history over time. Are earnings (net income) increasing and is the ROE consistently high (25-30%).
4. Does the business have favorable long-term prospects? Is it a franchise or least cost commodity producer? Look for “Goodwill”
Invest within your circle of competence. It’s not how big the circle is that counts, it’s how well you define the parameters. -- Warren Buffett
“Good Businesses are the ones that in some way are reasonably sheltered from competition. That gets to having what I call a franchise of some sort.” - Warren Buffett