Understanding a business

My job is to look at the universe of things I can understand—I can understand Ike Friedman’s jewelry store—and then I try to figure what that stream of cash, in and out, is going to be over a period of time, just like we did with See’s Candies, and discounting that back at an appropriate rate, which would be the long-term government rate. [Then] I try to buy it at a price that is significantly below that. And that’s about it. Theoretically, I’m doing that with all the businesses in the world—those that I can understand.