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.

Everyone has the brain power to make money in stocks. Not everyone has the stomach.

Investing in stocks is an art, not a science, and people who've been trained to rigidly quantify everything have a big disadvantage.

In the summer of 1990, I was buying stocks and I was probably three or four months early there. But we had a great rally in 1991.

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.

All the time and effort people devote to picking the right fund, the hot hand, the great manager have, in most cases, led to no advantage.

I'm always fully invested. It's a great feeling to be caught with your pants up.