· Strong competitive position. We prefer to buy companies that have a significant edge or franchise. This may include a technological edge, such as Intel has right now. It may include a distribution edge, such as Wal-Mart throughout the 1980's. The ideal, of course, is a monopoly or near monopoly, such as newspapers or utilities or companies whose products are protected by patents.
· Strong management. We look for managers who look out for the interest of the shareholders rather than simply plunder the company for their own good. We like managers to be significant shareholders. We look for managers who have been very successful at dealing with problems.
· Strong shareholder support. By this, we mean that the company and/or its officers are showing support for the company. The ultimate way to do this is to buy the stock. We therefore look very closely at insider buying or corporate stock buybacks. Academic research shows that this gives a very strong boost to the stock's price.

· Strong acquisition path. Companies that are aggressively growing through acquisitions can be a fantastic investment, at least for a couple of years.

· Strong innovation. Innovative companies can often carve out a strong competitive position through developing new products or technology.