To construct your own portfolio, Great Warren Buffett has suggested that What an investor needs is the ability to correctly evaluate selected businesses. Note that word “selected”: You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.
One’s knowledge and experience are definitely limited and there are seldom more than two or three enterprises at any given time in which I personally feel myself entitled to put full confidence”- John Maynard Keynes (The great economist)
With each investment you make, you should have the courage and the conviction to place at least ten percent of your net worth in that stock- Warren Buffett
Investors need only to understand – How to Value a Business, and How to Think About Market Prices.
Unfortunately, however, stocks can’t outperform businesses indefinitely