TJS Partners, Inc.

1)   Understand the business (a good investment idea can usually be summarized in one paragraph, or the front of one page.)

2)   Identify any competitive advantage the business may enjoy.  (If it doesn’t have one, it may still make sense, but the purchase price discount – the Margin of Safety - needs to be greater to protect against uncertainty.  See #4 below.)

3)   Management with competence, integrity and that is shareholder oriented.  (Peter Lynch said, “Invest in a business that an idiot can run, because eventually one will.”)

4)   A price that is a large enough discount to a conservative estimate of Intrinsic Value that it provides a “Margin of Safety” against the many things that can and do occasionally go wrong.

There are many ways to make money in financial markets, but the one strategy that has truly proven itself over the years is Value Investing.  It just works.  It has produced superior investment results (particularly on a properly measured risk-adjusted basis) to any other strategy. 

As Warren Buffett has said, no more than 125 IQ points are needed.  Any more and they are wasted.