We assess the value of a business based on our estimate of future profits and cash flow. Valuation is perhaps the most difficult part of the investment selection process, as great businesses with the characteristics we seek often trade at expensive valuations. We tirelessly seek to invest in businesses with a margin of safety, whereby the current share price is less than our estimate of a company’s intrinsic value. This isn’t an easy task, but we find that opportunities present themselves when we develop a deep understanding of a business. Our approach allows us to take a long-term view that looks beyond short-term “noise” in the market, which may be depressing a company’s current share price. We have also shown a willingness to hold cash in our portfolios while we wait for opportunities to surface.