The more confidence I have in each one of my stock picks, the fewer companies I need to own in my portfolio to feel comfortable.

I think the exercise of trying to figure out how to simplify concepts has been incredibly helpful to me over the last 13 years of teaching and I hope my students have benefited from it.

My goal is to buy a company at a low multiple to normal earnings power several years out and that the company earns good returns on capital at that level of normal earnings. A holding period of more than one year also works quite well as the factors are persistent in years 2 and 3.

I wait until an investment idea is so good, it hits me over the head like an anvil.

If you spend your energies looking for and analysing situations not closely followed by other informed investors, your chance of finding bargains greatly increases.

We are busy surviving, herding, fixating on what just happened, and being overconfident!

If I plug my estimates into the Magic Formula, and it comes out cheap, that's good.

Figure out what something is worth and pay a lot less.

Something out of the ordinary course of business is taking place that creates an investment opportunity. The list of corporate events that can result in big profits for you runs the gamut—spinoffs, mergers, restructurings, rights offerings, bankruptcies, liquidations, asset sales, distributions.

I don't know too many people that are good at timing the market relative to macro-economic events.