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Sell Discipline

Since we believe that business values are dynamic, and that businesses continue to grow as long as they have a strong balance sheet and are well managed, Third Avenue Management is a long-term patient investor. Therefore, our funds typically have low turnover. Often, sales are a result of resource conversion activity such as mergers, acquisitions, spin-offs, restructurings, management buyouts, assets sales, etc. Triggers for a voluntary sale in the open market include the following: the security appreciates and becomes excessively overweighted in the portfolio; the security becomes clearly overvalued; the business conditions change (i.e., a portfolio company experiences, or appears to have the potential for, a permanent impairment of capital); or our analysis was flawed.