It is easiest to evaluate this if they already have experience and success running a concentrated portfolio. For example, Mason Hawkins and Bill Nygren have both run concentrated funds. For stock pickers who have not run a highly concentrated portfolio, we ask them to put together a “mock” portfolio to reflect the stocks they would hold if they were already running a Litman Gregory Masters Funds portfolio. We then discuss the portfolio so that we can understand the criteria and the process used to identify the highest-conviction ideas and to build the portfolio. An important part of the process is a detailed discussion of the stocks in the portfolio with the objective of gaining an understanding about why they have stronger conviction that these holdings will be successful. We then make a qualitative assessment as to whether the manager has good reasons for their varying conviction levels between stocks (we may also discuss stocks they hold in their more diversified portfolios) and whether they are genuinely more confident in some holdings than others.