Liquidity

“There’s several ways you can deal with liquidity. One is to practice diversification by the number of names: We generally keep our portfolios between 80 names to about 120 names. This helps us deal with liquidity coming and going. The other part-and this just comes from experience- is knowing how to trade the securities. We’ve built a great network of trading firms and other investors such that we can find liquidity. We don’t have an approach of saying that the stock has to trade a certain number of shares. We’re much more about being investors in a business, so if we find something that’s very attractive but doesn’t trade a lot, it doesn’t concern us. We want to be owners in businesses we believe in. In fact, some of our attribution analysis shows that our biggest winners are the ones that had no liquidity in the beginning. They ended up being some of the big home runs within our portfolio.” Mike Corbett, Perritt Capital – JUNE 2016