Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.

The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.

It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment.

Traditionally the investor has been the man with patience and the courage of his convictions who would buy when the harried or disheartened speculator was selling.

The thing that I have been emphasizing in my own work for the last few years has been the group approach. To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company.

The intelligent investor gets interested in big growth stocks not when they are at their most popular - but when something goes wrong.

The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.