We're not playing a probability game, where you invest in 100 businesses and do fine if 70 of them succeed and 30 do poorly. We're trying to select 25 to 30 businesses to own and we count on all of them doing well over a five-year period.
We generally avoid the most deeply discounted stocks. In a normal market, companies trading at half of intrinsic value or less often do so because there is some significant risk in the business. It may be a low-probability risk, but we'll steer clear of highseverity, low-probability risks. In our portfolio today we only have one [...]