The authors state that Warren does not use the traditional contrarian investor approach of "bottom picking". Rather, he is interested in buying the best businesses at bargain prices. He differentiates between cheap stocks that are in price-competitive industries versus cheap stocks that have durable competitive advantages and he chooses to invest in the the latter of the two.
Ted William's book "The Science of Hitting", explains how Ted carved up the strike zone into 77 different cells. Ted would only swing at balls that were in the best cells, ones where he had the best chance to hit home runs. Warren read and used Ted's model to develop his own approach where he would only invest (swing) at the best investment ideas, ones that had durable competitive advantages and which were selling cheap. This combination produced many of the "home run" investment winners for Warren, including GEICO and the Washington Post.
A company with a durable competitive advantage usually sells a brand name product or service and faces little to no competition which allows them to earn healthy profit margins. The authors state that these companies also have the best long term prospects for continued growth and to weather short term problems and economic downturns.