1.) We buy stocks at or near the bottom of their respective cycles. When they revert a little, we sell them and use the proceeds to buy other stocks at cycle lows. We do this over and over and over again. That’s it.
2.) And because we know beyond a shadow of a doubt that we aren’t the brightest investors on Earth, we diversify in spite of its probable impact on alpha, and we ignore anything without a substantial perceived margin of safety.