"When buying stocks, Whitman's mantra is 'safe and cheap.' Whitman was an expert in bankruptcy investing before entering the fund business, and he favors companies that have the strength to pay off their debts ... Whitman and crew won't buy a stock unless it trades at a steep discount to the worth of the company's underlying assets. They tend to hold a stock for long periods ... 'Unless there are strong and compelling reasons, we don't sell.'"

"We're entering a period of time where the easy part of earnings growth is over, and so earnings growth is most likely to approximate nominal GDP growth. We assumed nominal gross domestic product would grow 6%. Add 2% in dividends, and you get an average annual gain for stocks of 8%. We're assuming average P-Es will contract from 18 times earnings to 15 times earnings over this period. That's about 3% to 4% a year. You get a return of 5% or less a year from stocks for the next five years, after a reduction of 3% to 4% a year from P-E contraction."

"We have always used periods of distress and chaos to deploy capital. We don't see a lot of that in the marketplace now."

"In bonds, you have inflation risk. At 4% government bond yields, I don't think I'm being compensated for that risk. The inflation numbers are massively under-reported. We think the fundamental inflation level is 2.5% to 3%. If we want to earn 3% after inflation, we don't think much value comes into government bonds until we hit the 5.5% level."