What should I look for when investing in a business venture?

Here are ten tips from Warren Buffet ...

1. Not Every Investment Can Be a Home Run ... I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
2. Weighted Portfolios Can Be Good – and Profitable ... Wide diversification is only required when investors do not understand what they are doing.
3. Never Pay Retail ... Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.
4. Invest in Companies, Not Their CEOs ... I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.
5. Remember that Past Performance Means Nothing ... If past history was all there was to the game, the richest people would be librarians.
6. Don’t Over Think It ... The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.
7. There Is No Magic Chart or Statistic for Investing ... Beware of geeks bearing formulas.
8. Know When to Cut Your Losses ... Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.
9. Know Your Strengths – And Weaknesses ... I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I’d been born into a tribe of hunters, this talent of mine would be pretty worthless.
10. Challenges Can Expose the Truth ... Only when the tide goes out do you discover who’s been swimming naked.