In holding around 40 stocks at a time, we’re trying to get the appropriate balance between diversification and putting most of our dollars in the names we like the best. As a practical matter, it’s difficult to find 40 names that you really like. The lion’s share of your excess returns will come from a few names the trick is identifying which those will be and placing bigger bets on them. Our clients typically require we limit maximum position sizes to 4 percent, but even with that restriction it makes a big difference in results over time if your largest positions outperform.