On concentration, and the risk of owning everything

Ten holdings make up 61% of the portfolio. That figure surprises people who expect a manager of $4.2B to own hundreds of companies.

Owning everything feels safe, but after fees it all but guarantees an average result. We would rather know 38 businesses well than know 300 by their ticker.

Concentration has a cost: a bad year in one holding shows. We never hold more than 40 names and we review the largest ten every month, so no single mistake can sink a mandate.