I recently read a book called Berkshire Hathaway Letters to Shareholders. One idea in it struck me as especially sound: when you buy and sell stocks, the goal should not be to sell at the highest possible price. The goal should be to buy at a lower one. A lower cost basis means you put less money in up front, and the later return is more likely to be reasonable. Compared with chasing the perfect top, it makes more sense to buy when something is cheap.

Of course, what counts as cheap is not simple. You probably need to understand the stock well, have some sense of its potential, and be able to read the market as it stands. That takes both knowledge and experience.