If we can't find undervalued stocks we'll let cash accumulate, as we believe cash is a better alternative than owning an overvalued security. I'd argue that having the patience and discipline to save your cash for when the fat pitches come along is probably the most valuable trait an investor can have.

Our fund usually has 40 to 60 positions. The actual number at any time is usually a function of how pricey the market is: When discounts are larger, the full weights tend to be 2 to 4 percent; when discounts aren't as large, position sizes are more like 1 to 3 percent.

Meetings [with management] tend to be promotional and I'm a sucker for a charismatic CEO. Early in my career I met with Dave Thomas, the founder and CEO of Wendy's. He was an incredibly nice guy and he told me over lunch all about this pita-sandwich concept they were rolling out. I came back to [...]

We don’t like making assumptions about highly uncertain outcomes, such as how a new product will work or an industry transition will play out. If you look at most value traps say newspapers or various industrials over timethey look extremely cheap if some significant problem goes away or isn’t as bad as expected. I try [...]