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For a very long time I had a therory about portfolio management. It was very simple, but it was just that, a therory.


Several years back, I told Arnold Van Den Berg (my oldest son works for him) that I had had this therory on portfolio management for a very long time with no real way to validate it.


He asked me what it was, and I told him that I thought the best way to manage an individual portfolio was to buy great companies at great prices.


He just grinned and told there was no other way to manage an individual portfolio, or for that matter, any portfolio.


When I asked him how much cash he thought an individual portfolio should have, he told me that in all the years since starting Century Management, the company's portfolio cash position had historically averaged about 20%.


I sort of adopted that number, 20%, and use it as part of my own portfolio "management" strategy.


Sometimes I just love...dull.



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