The risk to the growth investor is when the company’s growth rate materially changes where for a value investor their reward is where a value-based stock’s growth rate actually changes in a positive way. As you think through that graph and those two lines, one being the line describing the growth of a value stock, the other being a line describing the situation of a growth stock, we are interested in those two lines as well as the line in the middle of those two, which is growth at a reasonable price.

Q:  What is the number of holdings in your fund?

A: Our number of holdings has drifted up over time. We have 150 - 155 holdings right now. Our portfolio has what I would call ‘a long tail’ and by that I mean we have several positions of small size and it goes back to the ways to control risk as the new emerging therapeutics are often found in very small and highly risky companies.

Q:  Do you believe in concentrated bets?

A: Absolutely. If you are in a sector fund, you are already concentrated by nature. I don’t want you to think that all our 150 or 160 positions are of equal size. We have 30 or so small investments in companies that represent higher than usual risk. Our top 25 positions represent 49% of the fund.