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This article isn't all that interesting, but I'll point out the question and answer that caught my attention...

WP: How do you deal with that? [Referring to finding fewer cheap stocks]

"I don't move to cash. I've had huge inflows into the fund, but I'm nervous about letting the cash build up, because if the stock market runs and I'm sitting in cash, I underperform. That happened five years ago. I'm trying to keep fully invested. One thing I do is add to current positions. The other thing I do is I have to relax somewhat the undervalued standards. I have 88 to 89 percent of the fund invested. [The rest is in cash.] I would like to be up into the mid-90s, but it's hard to do when you have so much coming in."

Emphasis mine.

Here we have a professional fund manager saying he can't find cheap stocks, so instead of waiting for a fat pitch to come to him, he has relaxed his value standards.

This is a slippery slope, but speaks loudly to the "institutional imperative" of having to keep up with an index.

Stay disciplined Fools.

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