DONALD YACKTMAN:
"We buy pieces of businesses for the long term, not pieces of paper for the short term."
Portfolio Diversification
Portfolios will have adequate diversification, though not extensive diversification. Sire Line Capital concentrates very heavily in companies that we like the best, allowing our most attractive investment ideas to have a meaningful impact on long-term performance. Academic studies have shown that a portfolio can have adequate diversification with as few as 13-to-15 names. We believe that too much is made about diversification. In periods of severe panic and crisis, most assets are correlated. A good example of this is the most recent credit crisis of 2008/2009 in which almost every asset class lost a significant amount of value in a very short time. The simple truth is that it’s very hard to find 100 great investment opportunities, but there can often be 20.