14. Please describe your sell discipline. To what extent do you allow your winners to run? Do you have an investment time horizon or expected holding period during which an investment should reach your targets?

Our sell discipline is a function of our purchase discipline. If a company disappoints, we sell it. If the stock price gets to what we consider fair value, we sell it down to a 4-5% position in the portfolio. But if the company is doing what we expect it to do, and the stock price is simply down, we are fairly patient–particularly if we understand why the stock price is down. If we cannot figure out why the stock price is down, if relative strength is breaking down, then we suspect someone may know something we do not, and we sell the company. The rule is: if in doubt, sell out. We don’t have an expected holding period, but we tend to own companies for 3 years or more.