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.

Owning stocks is like having children - don't get involved with more than you can handle.

Your ultimate success or failure will depend on your ability to ignore the worries of the world long enough to allow your investments to succeed.

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.

Charts are great for predicting the past.

My high-tech aversion caused me to make fun of the typical biotech enterprise: $100 million in cash from selling shares, one hundred Ph.D.'s, 99 microscopes, and zero revenues.

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.