First, he seeks “profitable businesses with good returns on capital and not too much leverage.” Second, the management team must have “equal measures of talent and integrity.” Third, the company should have ample opportunity to reinvest its profits at handsome rates of return. Fourth, the stock must be available to him at a “reasonable” price.

Smart investors are aware of their inability to pick only winners, and this distinguishes professionals from amateurs. I always smile when I hear tourist angels boast about how they've only made two or three investments “and they are all home runs.” Whenever you start thinking that the experts pick all the winners and only winners, stop by the anti

Here are some of the questions that prominent financial planners recommended any prospective client should ask: