There's no use diversifying into unknown companies just for the sake of diversity. A foolish diversity is the hobgoblin of small investors. That said, it isn't safe to own just one stock, because in spite of your best efforts, the one you choose might be the victim of unforeseen circumstances. In small portfolios, I'd be comfortable owning between three and ten stocks.

If you can't find any companies that you think are attractive, put your money in the bank until you discover some.

You have to keep your priorities straight if you plan to do well in stocks.

Often, there is no correlation between the success of a company's operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies.

You have to let the big ones make up for your mistakes.

Behind every stock is a company. Find out what it's doing.

The natural-born investor is a myth.