The Essence of Warren Buffett’s Value Investing

In the early stages of value investing, buy only monopolistic companies.

Buffett's criteria for buying a company are: you can't do without it. The people in the region must have had such a consumption habit for many years, and in that field, this company is the only option for local consumers.

As his capital base grows, he has to relax the criteria.

A duopoly also works, meaning two companies split a local market for an essential consumer need.

Or even a dominant market leader, where one company holds the majority share of the market.

Because the capital he manages keeps growing, and the best opportunities have already been taken, he is forced to expand his search. But for most people, this isn't something to worry about, because chances are, you'll never have the luxury of having as much money to invest as he does in your lifetime.

The above covers buying. As for selling:

This brings us to another one of Buffett's principles. He not only requires that a company be nearly a monopoly in a particular region or business, but more importantly, he insists that you be accountable only to shareholders. (In other words, prioritize making money for shareholders.)