Sublime

1½ times net asset value. Price no more than 15 times average earnings of the past three years. We make no predictions

company is a Johnny-One-Note, relying on one customer (or a handful) for most of its revenues.

Sit still: Patience—measured not just in years but in decades—is an investor’s single most powerful weapon. Witness Rosenfield’s fortitude: In 1990, right after he bought Freddie Mac, the stock dropped 27%—and Grinnell’s total endowment shriveled by a third. And although Sequoia crushed the S&P 500 cumulatively from 1979 to 1998, the fund under

C Current Quarterly Earnings and Sales: The Higher, the Better A Annual Earnings Increases: Look for Significant Growth N New Products, New Management, New Highs: Buying at the Right Time S Supply and Demand: Shares Outstanding Plus Big Volume Demand L Leader or Laggard: Which Is Your Stock? I Institutional Sponsorship: Follow the Leaders M Market

But it compelled me to watch Jefferies more closely, a company whose namesake and origin, unlike Morgan Stanley, had a pretty non illustrious past (for starters, I had never worked at an established firm that had only one name).

THE COMPLETE FINANCIAL PICTURE

WARREN BUFFETT Founder and CEO, Berkshire Hathaway