Value investing doesn't always work. The market doesn't always agree with you. Over time, value is roughly the way the market prices stocks, but over the short term, which sometimes can be as long as two or three years, there are periods when it doesn't work. And that is a very good thing. The fact that our value approach doesn't work over periods of time is precisely the reason why it continues to work over the long term.

Remember, it’s the quality of your ideas not the quantity that will result in the big money.

We are busy surviving, herding, fixating on what just happened, and being overconfident!

The big picture is: the main thing you should be concerned about in the future are incremental returns on capital going forward. As it turns out, past history of a good return on capital is a good proxy for this but obviously not foolproof. I think this is an area where thoughtful analysis can add value to any simple ranking/screening strategy such as the magic formula. When doing in depth analysis of companies, I care very much about long term earnings power, not necessarily so much about the volatility of that earnings power but about my certainty of "normal" earnings power over time.

Figure out what something is worth and pay a lot less.

The way we make money as a group is that we don't pay a lot for anything, and most of the stocks we buy have low expectations.

If I plug my estimates into the Magic Formula, and it comes out cheap, that's good.