- Avoid obvious overvaluation; and
- Concentrate on apparently dramatic undervaluation.
"Investors do not make mistakes, or bad mistakes, in buying good stocks at fair prices. They make their serious mistakes by buying poor stocks, particularly the ones that are pushed for various reasons. And sometimes – in fact, very frequently – they make mistakes by buying good stocks in the upper reaches of bull markets."
- Buying rubbish (or speculative nonsense)
- Overpaying for quality.
"An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative." (Emphasis ours)
"We don't have to be smarter than the rest. We have to be more disciplined than the rest...We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely."