As I have said many times before, "why buy your 50th best idea instead of adding to your 1st best idea" almost never worked for me.
True for me also.
Maybe it works for people who have a narrow scope. The market is a wide spectrum though, and because something is always happening, I always say I view market prospects as emergent - that is, my best ideas are emergent.
For example if it's suddenly announced that Ecuador or somebody is intending to fine Chevron xx $billions or a plane crashes killing Chevron's top people or something else terribly bad makes the news and Chevron stock drops 25% when it opens and I happen to see it, then right then and there Chevron stock would become my best idea and a buy. (I've roughly followed CVX for about 20 years, so I'm not totally unfamiliar with it.)
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...most of the time the one I think is better performs worse than the one I think is worse.
Stated conversely I believe, for me, my best performers are often the most surprising to me.
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Which leads to the issue of maintaining a fully-invested portfolio and then finding an emergent stock. Something has to go to make room. Not so wise maybe to replace "the worst idea stocks", if I, like you, can't really order the stocks best-to-worst, and if some of the "worst" historically have turned out to be good winners.
I've no suggestions for others; for me, I either reduce (not sell out) one or more positions, deploy cash if I have it, or maybe use margin. |
