I wait until an investment idea is so good, it hits me over the head like an anvil.

The more confidence I have in each one of my stock picks, the fewer companies I need to own in my portfolio to feel comfortable.

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

Here is part of the tradeoff with diversification. You must be diversified enough to survive bad times or bad luck so that skill and good process can have the chance to pay off over the long term.

There's a clarity that comes with great ideas: You can [easily and simply] explain why something's a great business, how and why it's cheap, why it's cheap for temporary reasons and how, on a normal basis, it should be trading at a much higher level. You're never sitting there on the 40th page of your spreadsheet, as Buffett would say, agonizing over whether you should buy or not.

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.

I don't know too many people that are good at timing the market relative to macro-economic events.