How the record has been achieved is crucial, as is the manager’s understanding of — and sensitivity to — risk (which in no way should be measured by … - Warren Buffett

We select such investments on a long-term basis, weighing the same factors as would be involved in the purchase of 100% of an operating business: (1) favorable long-term economic characteristics; (2) competent and honest management; (3) purchase price attractive when measured against the yardstick of value to a private owner; and (4) an industry with which we are familiar and whose long-term business characteristics we feel competent to judge.

Culture, more than rule books, determines how an organization behaves.

Instead, he takes those coupons from his low-return bond and — if inclined to reinvest — looks for the highest return with safety currently available. Good money is not thrown after bad.