The Cook & Bynum Fund's 10-Stock Portfolio

This large blend fund is off to a fine start. But its concentrated approach carries big risks.

The Cook & Bynum Fund (symbol COBYX) gives new meaning to the idea of concentration. Richard Cook and Dowe Bynum, managers of the two-and-a-half-year-old fund, typically hold no more than 15 stocks. As of September 30, they held only ten, accounting for 68% of the $61 million fund's assets (the rest was in cash).

Less is often better, says Cook. "If you own 50 stocks, I don’t think you can have adequate information and know what you own," he says. "It’s usually a better idea to put more money in your best idea than in your 20th-best idea."

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Jennifer Schonberger
Staff Writer, Kiplinger's Personal Finance