Actually, the best solution is to punch the bully in the nose.
It is. A kick in the nuts works too.
Most "bullying experts" fail to understand why a bully does what he (or she) does. It's not a problem with their self-esteem or any other crystal-rubber hokum. They do it because it's fun. It entertains them. And if there's blood suddenly running down the bully's shirt, the bullying ceases to be fun.
At it's heart, the interaction between bully and victim is an economic transaction. The bully is gaining something; entertainment. However, most bullies are unwilling to pay a steep price for that entertainment. This is why they pick on the weak. Retaliation is unlikely and thus the potential cost of their entertainment is low. If the victim strikes back, however, then the entertainment is no longer worth the price. The bully can always find a cheaper, less risky source of entertainment.