Employing databases and statistical skills, academics compute with precision the 'beta' of a stock... then build arcane investment and capital-allocation theories around this calculation. In their hunger for a single statistic to measure risk they forget a fundamental principle: It is better to be approximately right than precisely wrong.

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In assessing risk, a beta purist will disdain examining what a company produces, what its competitors are doing... What he treasures is the price history of its stock. In contrast, we... seek whatever information will further our understanding of the company's business. After we buy a stock we would not be disturbed if markets closed for a year or two.

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The true investor 'welcomes' volatility...a wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses.

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We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors... we have usually made our best purchases when apprehensions about some macro event were at a peak. Fear is the foe of the faddist, but the friend of the fundamentalist.

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