1. They must earn good returns on capital in their operations

2. They must be run by able and honest managers

3. They must be available at a “sensible” price

But what really lies behind this engine of investing success is this… This is what Warren Buffett focused on to grow his investments Warren Buffett’s investment strategy evolved a lot since he first started Buffett Partnership in 1956. The market had huge inefficiencies then. And information was not widely available. The thing is, Warren Buffett first used a strategy called “cigar-butt” investing — an old investing concept taken from his late mentor, Benjamin Graham. Buffett would buy distressed companies at a cheap price and sells it off later for a high profit. Similar to how you’d pick up a cigar on the floor for one last puff, before throwing it away....