How To Manage a Stock Portfolio - Investment Portfolio Strategy
5.2 هزار بار بازدید -
3 سال پیش
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So when you find a company to invest in, you have spent hours and hours researching the company. Followed it for many weeks, months or even years. Waiting patiently for the price to reach a level you are happy to pay.
Finally the time arrives. The valuation has reached your first buy price, well do you know how much you are going to allocate as a portion of your portfolio to this investment?
Portfolio management is something that is wildly different across every investor. Each person has their own preferences.
In my opinion, portfolio management is pretty easy to understand but really difficult to implement. Today I’ll discuss portfolio management strategy and hopefully you will have a better idea how to think about your portfolio structure.
Let me set the tone of this video. I am coming at this topic from a long term value investor. That likes to see my investments grow bigger and bigger over years.
Nothing in this video is going to sit well for investors that don’t do a lot of research.
How much Diversification
Now If i have one great idea. That i am super confident with. Well I could put all 100% of my portfolio in this idea and sit back and see what happens.
If it is my best idea and I think it will give me the best return, then this would be the best way to get the biggest return on my money.
If I think it is going to go up 100x in the next 15 years. Well I should put everything into that.
The problem is I am not strong enough in my idea to ever do that. I will always have a little doubt in my mind thinking that,
“What if the management team are lying and it's all an act?”
“What if there is fraud in the financial statements?”
“What if all the key employee’s die in a freak bus crash?”
“What if something I just can’t predict, comes along and changes the entire industry. Something that I can’t foresee.”
Ok so, for me, having all my money in 1 idea is a little too much for me.
The best investors in the world, like Mohnish Pabrai, Li Lu, Norbert Lou, Charlie Munger and a handful of others have less than 10 investments in total.
That is starting to feel about right. Put as much money into a handful of great ideas. A little diversification, but not too much.
Also they only invest in companies that have a great chance of going up 10x or 100x in the next decade. No point investing in something that is going to just double or triple and that’s it.
But there are other, very famous, highly successful investors that have 100’s of investments in their portfolios.
Peter Lynch is the one that comes to mind first. Peter Lynch is one of my favorite investors of all time and he ran the Megallen fund back in the 1980’s.
At times he had over 1000 investments. Yet the fund performed just about the best of anyone in the entire world. Better than Warren Buffett during that period.
Warren Buffett even has over 50 stocks in the Berkshire Hathaway portfolio.
I have even heard Mark Cuban say before that Diversification is for Idiots. But that’s unfair considering Peter lynch absolutely killed it for over a decade with a very diversified portfolio.
So there are many opinions on this one. I don’t know what is best, but I think 10 good ideas feels like it would be easier to manage and keep up to date. I have no idea how Peter Lynch kept up to date with a 1000 companies.
CLICK HERE -
https://www.interactivebrokers.com/mk...
Undervalued - My monthly Commentary and up to date watchlist information. Check out the February edition for free
https://undervalued.ghost.io/#/portal...
Inaugural Money Managers Game 2022
Join the Discord Group for instructions - Discord: discord
TIKR: Financial Data on All Companies plus Super investor portfolios plus an International screener.
http://www.tikr.com/andrew
HAMISH HODDER’S AMAZING COURSE
70+ Hours of Stock Reports
Private Investor Community with Hamish
Judgement Day BONUS Module
Use discount code ‘BROWN’ at checkout for 30% OFF
More Information - https://www.hamishhodder.com/a/214749...
Andrew Brown’s Intrinsic Value Calculator
https://mailchi.mp/02b28ffff5ef/intri...
My other trading platform that I use. Reliable and regulated trading platform.
SAXO BANK LINK: https://www.home.saxo/en-mena/account...
Twitter:
@abrowninvesting
So when you find a company to invest in, you have spent hours and hours researching the company. Followed it for many weeks, months or even years. Waiting patiently for the price to reach a level you are happy to pay.
Finally the time arrives. The valuation has reached your first buy price, well do you know how much you are going to allocate as a portion of your portfolio to this investment?
Portfolio management is something that is wildly different across every investor. Each person has their own preferences.
In my opinion, portfolio management is pretty easy to understand but really difficult to implement. Today I’ll discuss portfolio management strategy and hopefully you will have a better idea how to think about your portfolio structure.
Let me set the tone of this video. I am coming at this topic from a long term value investor. That likes to see my investments grow bigger and bigger over years.
Nothing in this video is going to sit well for investors that don’t do a lot of research.
How much Diversification
Now If i have one great idea. That i am super confident with. Well I could put all 100% of my portfolio in this idea and sit back and see what happens.
If it is my best idea and I think it will give me the best return, then this would be the best way to get the biggest return on my money.
If I think it is going to go up 100x in the next 15 years. Well I should put everything into that.
The problem is I am not strong enough in my idea to ever do that. I will always have a little doubt in my mind thinking that,
“What if the management team are lying and it's all an act?”
“What if there is fraud in the financial statements?”
“What if all the key employee’s die in a freak bus crash?”
“What if something I just can’t predict, comes along and changes the entire industry. Something that I can’t foresee.”
Ok so, for me, having all my money in 1 idea is a little too much for me.
The best investors in the world, like Mohnish Pabrai, Li Lu, Norbert Lou, Charlie Munger and a handful of others have less than 10 investments in total.
That is starting to feel about right. Put as much money into a handful of great ideas. A little diversification, but not too much.
Also they only invest in companies that have a great chance of going up 10x or 100x in the next decade. No point investing in something that is going to just double or triple and that’s it.
But there are other, very famous, highly successful investors that have 100’s of investments in their portfolios.
Peter Lynch is the one that comes to mind first. Peter Lynch is one of my favorite investors of all time and he ran the Megallen fund back in the 1980’s.
At times he had over 1000 investments. Yet the fund performed just about the best of anyone in the entire world. Better than Warren Buffett during that period.
Warren Buffett even has over 50 stocks in the Berkshire Hathaway portfolio.
I have even heard Mark Cuban say before that Diversification is for Idiots. But that’s unfair considering Peter lynch absolutely killed it for over a decade with a very diversified portfolio.
So there are many opinions on this one. I don’t know what is best, but I think 10 good ideas feels like it would be easier to manage and keep up to date. I have no idea how Peter Lynch kept up to date with a 1000 companies.
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