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"Although we will invest with an intention to hold for the long term, we will also insist on keeping a solid margin of safety on all Fund holdings. As a result, we will sell any holding that we believe has appreciated beyond its intrinsic value."

Typical optimism. They just assume that they will have to sell if the stock goes up too much.

What if it tanks? Think of it as a buying opportunity?

I think the issue they were addressing in the paragraph quoted above is specifically to reassure investors about the conflict between their strategy of holding onto stocks for long times, versus the possibility that a stock can become overvalued (and/or its fundamentals change for the worse) while they own it.

That's pretty exactly the scenario you described further on: ...the guys who, in one of their model portfolios, bought 3COM, watched it double, then watched it tank, and finally sold it for a loss.

The paragraph above specifically says (in so many words) "If a stock doubles then we'll probably sell some or all of it -- rather than watch it go back down again." It seems like they were anticipating your critique!

Personally, I found things on the website that make me a little skeptical or cautious, but none of those things had been cited in the thread earlier. The website identifies the manager but I didn't look that closely; it'd be interesting to see just how independent he can be if he doesn't agree with what the columnists are writing here.

I'm curious to find out what they're holding, and whether they can beat the street. But I would not buy a fund so new in any case, so for me it's all academic.
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