A single year's performance is of minor importance and, good or bad, should never be taken seriously.

I have worked with investors for 60 years and I have yet to see anyone - not even when capital gains rates were 39.9 percent in 1976-77 - shy away from a sensible investment because of the tax rate on the potential gain.

With enough insider information and a million dollars, you can go broke in a year.

We do not have, nor have had, and never will have an opinion about where the stock market, interest rates, or business activity will be a year from now.

In other words, the percentage change in book value in any given year is likely to be reasonably close to that year's change in intrinsic value.

I just don't see anything available that gives any reasonable hope of delivering such a good year and I have no desire to grope around, hoping to 'get lucky' with other people's money. I am not attuned to this market environment, and I don't want to spoil a decent record by trying to play a game I don't understand just so I can go out a hero.

I get to do what I like to do every single day of the year.

The optimum portfolio depends on the various expectations of choices available and the degree of variance in performance which is tolerable. The greater the number of selections, the less will be the average year-to-year variation in actual versus expected results. Also, the lower will be the expected results, assuming different choices have different expectations of performance.

A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth.