7 criteria of a rule maker:

  1. repeat purchase of low-priced products
  2. gross margins
  3. net margins
  4. sales growth
  5. cash to long-term debt ratio
  6. foolish flow ratio
  7. familiarity and interest

Chicks Dozen!

  1. Buy what you know
  2. KISS (Keep It Simple Sister!)
  3. Industry
  4. Leader in its field
  5. Repeat Profitability
  6. Gross Margins (Revenues - Cost of Sales) / Revenues = Gross Margins > 50%
  7. Net Margins Net Income/Sales > 8%
  8. Lots of Cash Cash/long-term Debt > 1.0 Cash = marketable securities and short-term investment
  9. Flow Ratio (Current Assets - Cash)/(Current Liabilities - Short Term Debt) = Flow Ratio < 1.5
  10. Increasing Growth
  11. Strong Management
  12. Buy on Sale