You have to understand what market history looks like. What market history tells you is that the very, very best investments are made when things look the worst.

It's human nature to find patterns where there are none and to find skill where luck is a more likely explanation (particularly if you're the lucky manager).

All the things that make us human make us terrible investors and you have to understand what they are and how to avoid them.

A decade ago, I really did believe that the average investor could do it himself. I was wrong. I've come to the sad conclusion that only a tiny minority, at most one percent, are capable of pulling it off. Heck, if Helen Young Hayes, Robert Sanborn, Julian Robertson, and the nation's largest pension funds can't get it right, what chance does John Q. Investor have?

When it comes to fund managers and market strategists, this year's hero usually turns into next year's zero.

You have to ask yourself, what are the things that matter to you most in your life? If you have to have a latte every day that'snice to have right now, but if you take that latte every day right now, you may wind up eating cat food when you are 70. And you have to decide which is worse.

You have to understand what market history looks like. What market history tells you is that the very, very best investments are made when things look the worst.