We think complexity is the biggest barrier to high performance in investment business. Complexity introduces undesired extra errors. We keep our investment process and design our firm structure absolutely as simple as possible. 

We believe that the business world is divided into a tiny number of wonderful businesses and a large number of mediocre businesses that are not attractive as long-term investments. 

We think of a stock as a fractional interest in a business. How much would we pay for all of this company? and on that basis, what will we pay for 1 percent of it? It is irrational for an investor buying a stock and not have in mind the operating realities of the underlying business.  

Investing is about predicting the future, even after trying our best to distinguish between what we know and what we don’t know, the future is inherently unpredictable. Thus, margin of safety is a form of intellectual honesty. Price is our ultimate due diligence. 

Most of the time most businesses are not worth what they are selling for, but on rare occasions businesses are almost given away on the stock market. The market is there to serve us and not to guide us. A sole business owner never becomes as crazy as the market sometimes does. Volatility is a plus to the real investor. 

Stock investment is an unusual business which you can wait for the right opportunity that you understand and know to be a bargain.

We are not striving to correctly value all investments at all times. We recognize that we have insight into very few businesses and only act in situations where we have some kind of edge in reasoning or experience to evaluate something differently than others. A lot of things end up in our “too hard” pile, and it does not bother us. 

We start out by holding cash, and that is a pretty good opportunity cost, because cash doesn't go down. Any time we find an investment, it has to make the portfolio better than what we already have. Essentially, our job as portfolio manager is to constantly improve on our basket of businesses.