One thing about our process that I believe helps us when it comes to selling is that we lay out specific milestones in writing that we're counting on to support our thesis. We try to be as specific as possible: inventory turns are expected to improve by this much by the end of 2010, or [...]

We've done research on all of our buy and sell decisions and based on 20/20 hindsight isolated how each one adds or detracts from the overall value of the portfolio. We found that we generally did a good job of selling losers and of holding on to winners. Where we didn't do so well was [...]

We typically hold 30 to 35 stocks. We cap any one position at no more than 6 percent of the portfolio, but we won't put anything in the portfolio at less than a 2 percent position. Setting things up this way keeps us from being distracted, makes us dig that much harder for truly interesting [...]

We're looking for the prospect of an accelerating rate of positive change. That means we're naturally drawn to management changes, turnarounds, or, more generally, to situations in which changes in the macroeconomic, competitive or regulatory landscape require a company to remake what it does or how it does it. That strategy is particularly tailored to [...]