A: The primary risk we are worried about is the permanent loss of money. Avoiding overvalued assets and protecting against the ongoing threat of inflation are two major ways we aim to mitigate this risk.

Because of our strict buy discipline, we are very price sensitive. The lower the price we pay compared to our estimate of intrinsic value, the less risk we are taking. That’s a traditional value investing discipline but for us that would be component number one of risk control.

Component number two would be avoiding concentration on individual stocks or credits. We are very cognizant of our individual exposures and choose to diversify among names to help mitigate the company specific risk.

We also use certain defensive measures and hedging instruments when appropriate. We have used volatility options, shorts, and even some currencies as defensive measures to help protect the overall fund should the market environment deteriorate and expose our Funds to more risk than we are comfortable with.