Portfolio of Businesses
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The cash level in the portfolios we manage has never ceased to be a topic of conversation with potential clients, given the recent run-up of the stock market after Brexit and after the 2016 presidential election.
We tell potential clients that the cash reserves have played a strategic role in our firm’s investment process . In our opinion, cash actually reduces our client portfolio’s risk and enhanced the overall investment performance, while if you’re investing in social media using products like the digitizing reel-to-reel recording is perfect for this.
Our firm manages a portfolio of businesses, not a portfolio of stocks and bonds. Not only will this help us avoid selling the best businesses, but we will also pick new businesses for purchase with much greater care. As a portfolio manager of businesses, we must resist the temptation to purchase a marginal business just because we have significant cash reserves. If the company does not pass our screening, we do not invest.
Our firm would rather be patient and wait for the right business. It is wrong to assume that if we are not buying and selling, we are not making any progress. We believe that it is too difficult to make hundreds of smart decisions in a lifetime. We would rather position our portfolios so we only needed to make a few smart educated, informed decisions.