A primary consideration to Buffett, who, although seeking simplicity, is not a simpleton, is to find companies with businesses that provide essential basic products or services and do not require much invention. He expects strong cash flow and return on equity but waits for the stock price to offer a value proposition.

These types of business among those acquired or invested in by Berkshire Hathaway (NYSE: BRK.A) make things like paint, carpet, drywall, underwear, chocolate, beverages, and ice cream, with insurance being the largest.

If you read the Berkshire annual reports, you will see that Buffett often makes mention of the talent and integrity of the managers he works with and those that run the companies he invests in.

Two of his largest deals recently have been the much-discussed billions of dollars in preferred stock and warrants Buffett received when he invested in General Electric (NYSE: GE) and Goldman Sachs Group (NYSE: GS) to shore up their balance sheets. In the case of Goldman, he hit a home run and will likely end up its largest shareholder. So far GE has been a losing proposition.

Many would argue that both of these companies are very complex. Is Buffett bending his own rules? Maybe he thought the deals were just to good to pass up?

Last week when I posted Chasing Value: GE -- the Exxon of water and made the case that GE was actually much better integrated than most people gave it credit for, I received comments that were very negative. Things like Jeffrey Immelt is bad news and has hurt the company or pledging that they would never buy anything from them.

It bothered me that among all the gripes there was not a shred of reasoning to back up or explain why they felt the way they did, so I decided to delve deeper and give them a platform to express themselves posting Chasing Value: Blaming GE's Immelt for what? -- I got nothing. They all went silent.

I have been critical of GE in the past, but after giving it more thought, in particular about the subject of water and Immelt's situation, I am a greater supporter. However, I bought in at $16 and might feel differently if I owned it at $40.

In the wreck we have called our economy in the past 18 months, the people running our companies have not done themselves any favors by the lack of transparency put forth. In many cases they seem like idiots, whether they are or not.

Quarter after quarter we hear a common refrain: "we expect the business environment to be very challenging going forward." That is so very worthless in describing the business environment when uttered from the umpteenth CEO or CFO during earnings conference calls and during interviews. It is no more than the shrug of one's shoulders in terms of being very descriptive, informative, or specific. It informs the listener of very little.

The business environment is always challenging. I am reminded of the advertising pitch, "This is a limited time offer" or "This is a limited edition." Every edition is limited by definition. The critical thing is whether the limit creates scarcity or not.

Well, there seems to be a scarcity of leadership at times, although that is not the same thing as idiocy.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of BRK.B and GE.