The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient.

The dominant factors affecting control valuations are earning power (past and prospective) and asset values.

You don't need to be an expert in order to achieve satisfactory investment returns. But if you aren't, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don't swing for the fences.

My wealth has come from a combination of living in America, some lucky genes, and compound interest.

Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the models. Beware of geeks bearing formulas.

Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.

Look for companies with high profit margins.