We look for excellent profit margins and above average returns on capital
We demand a solid and conservative balance sheet
We like companies with durable competitive advantages
We want capable and honest managers focussed on creating value
Conservative models and assumptions are used in trying to predict the evolution of the business
We simulate different scenarios in order to test the resiliency of the business
We compare the company being evaluated with similar companies
We apply a margin of safety to determine the price at which we are willing to invest
This is the crucial step that allows us to substantially reduce the risk of permanent loss of capital
We only buy the asset when it is trading at a 30% to 40% discount to its intrinsic value
We do no try to guess the short term movements of the market: we invest for the long run
We periodically reassess our valuation model and the estimate of intrinsic value
We hold the investment until the market recognizes its true value
