Avoid companies that are cavalier about issuing new options to managers.

Success in investing comes not from being right but from being wrong less often than everyone else.

The intrinsic value of an asset is determined by the cash flows you expect that asset to generate over its life and how uncertain you feel about these cash flows.

In the intrinsic valuation chapter, we observed that the value of a firm is a function of three variables – its capacity to generate cash flows, its expected growth in these cash flows, and the uncertainty associated with these cash flows.

Einstein was right about relativity, but even he would have had a difficult time applying relative valuation in today’s stock markets.

Do not be afraid to make mistakes.

Growth firms get more of their value from investments that they expect to make in the future and less from investments already made.

Avoid companies that are cavalier about issuing new options to managers

A firm can have value only if it ultimately delivers earnings.

Einstein was right about relativity, but even he would have had a difficult time applying relative valuation in today's stock markets.