So many things impact the markets, from history, to politics, to popular culture, and those elements change day-to-day. The challenge of working through all that is consistently exciting–and you can see your results on a real-time basis.
Our level of diversification [130–140 positions] is just spreading the risk. It serves us well during downturns, which was certainly reinforced in 2008. I think it also makes us less emotionally attached to ideas and more willing to admit we're wrong, which is important for any investor.
The very first thing we do when we start to analyze a company is to ask ourselves how far the stock price would fall if we were wrong. It's not some back-of-theenvelope We believe in the power of compounding and the simple math is that you can't compound very well if you suffer too much [...]
I do believe mid caps to some extent offer the best of both worlds. They're usually not as well followed as large caps and by the rule of large numbers can have longer growth runways. At the same time, they're broader-based and therefore less volatile than small caps, with better liquidity. I also think it's [...]