I've tried not to violate basis, paying more than my highest price, because in the preponderance of cases, it has been wrong. Remember that Emerson (EMR) - Get Report situation we talked about? That's not going to go out the window, but I think we're constricting ourselves too much by doing it.
Let's take (DD) - Get Report, DuPont. This stock’s confusing. We own more of it than we did because we didn't tender for IFF, which I know in retrospect was not as I would have hoped. That's OK. I own that. But it's gotten way too cheap, even if it is above our basis. Am I going to white-out our basis this time and buy back the stock above where we did earlier? Yes. Why? Because this is a totally new company. It's a new stock, much better earnings power in a situation where we need some economic-recovery stocks that are levered to the two most exciting themes in the economy, housing and autos.
I can't hide behind discipline – let me put some air quotes around “discipline” – when I'm really hiding behind embarrassing. We may buy PayPal (PYPL) - Get Report too high, but if we think it's going to go higher, we will put some on. We will white out that old basis. We will white it out in our brain. We're going to stick by our 30 or so limit of stocks – in the mid-30s plus. … as always. And it will force us to sell the Marilyn for the Lautrec. We just don't have the bandwidth to write and research more stocks. Jeff Marks and Zev: We do such a good job, but holy cow, it's just a merry band of three.
If it turns out that we sold the wrong stock, we aren't going to wait for it to go from 10 to 2 million. We may buy it back at 12. if it is a changed company. We are, of course, always going to make wrong calls. When I see Viacom, (VIAB) - Get Report I still want to scream. I'm talking about a less burning issue here now. I got exhausted by Viacom. I didn't trust my own homework. I read the tweets. I read the comments. I have explored, mulled it over as much as I can without too [much] self-mutilation, flagellation. It's become a remarkable spur for me, though, to have less doubt about my work than I have had in a long time.
What matters, though, is that we can't let a good stock go too soon. We can't let a good stock go too soon. And we have to be willing to buy more if it goes lower and buy it back. If we sold it as part of a discipline of having too many names, we're thinking it will look silly to the thousands of you who belong to the club and are listening to this call.