The Biography of Buffett

Return on investment: Focus on the ratio of profit to invested capital

Operating profit and next year's expectations

Return on equity: How much can $1 earn

Operating privilege (a form of monopoly)

Buy in large quantities when prices drop significantly

A share of equity purchased is a share of the company's future earnings

The core is how much you think the company is worth

Always think the other way around (What could cause a significant rise in company profits? What could cause a decline?)

Float

Book value and intrinsic value: Book value is the company's current capital and accounting profit, while intrinsic value is the return on an investment made now. Book value cannot reflect the value of intangible assets like brand value.

(Buffett's investment journey isn't just about buying stocks at cheap prices—cigar butts, Graham's favorite. He also personally works to solve the company's crisis issues.)

The best way to combat inflation is to buy consumer goods companies recognized by the public, as they can raise prices with inflation.

Shareholder interests come first (sounds like a professional ethic for fund managers or entrepreneurs).