It's more of a meditation than a specific instruction. This works for other kinds of advice: "Do the right thing?" doesn't help much, but saying "Am I doing the right thing?" at the right moment can save you a lot of grief.

Actually, it is pretty specific. In essence, Buffett says you should first figure out what it would be worth to own the entire company (the "intrinsic value"; calculating this is something of a black art) then divide that by the number of shares the company has issued. Only if the current price per share is significantly lower than that (the "margin of safety") should you think about buying.

Which is about as specific as "First you should figure out what it is that cures cancer, and then you should have people with cancer do that thing." Calculating the intrinsic value of a business is very, very difficult -- which is why Buffett is so rich from being good at it.

You're absolutely right. The cartoon only mentions qualitative factors. If the business has been doing well, and those factors are present (and other explanations are absent), then it's a reasonable bet that those factors are the reasons for the the business's success. You can then examine each of these factors in isolation and assess how likely they are to continue in future.

With these qualitative factors settled, you can look at the numbers, especially the rate of growth of profit, and assume that they will continue (taking into account how sure you are of this), and calculate what the business is worth based on extrapolating that growth. Extrapolation is easy.

As a contrast, consider companies during a boom. Explosive growth, even in profitability, but... Another contrast is high tech companies, which can be extraordinarily profitable, but their long-term success has proven hard to predict. Buffett says he won't invest in something unless he understands it - as a programmer, this is great to hear from someone who is so incredibly successful.

Now you know the secret. When your grandkids ask you how you became so rich, you can tell them: "it was all because of 10ren".

BTW: Thanks for reminding me of all this! Now is the best time to buy stocks. They're on special.