Gorilla and King Portfolio Candidates Message Board

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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: darbyc who wrote (29765)	8/10/2000 10:13:52 PM
From: Mike Buckley	Read Replies (3) of 54805

Stan, There's probably nothing more that I like than when someone like you shows up and announces that they're investing their first $10,000. Making that initial commitment to a savings and investment plan is sometimes the most difficult and, as a result, the one to be most admired. Congratulations! I hope others have already given you some ideas to mull over. Mine would be to alert you to the idea that adding other companies to your portfolio puts you at risk of becoming overly diversified. Naturally, picking up a stock such as Intel on an employee plan is a reason to make it an exception. But when considering others, remember that statistics show that 8 stocks provides 90% of the diversification of 20 stocks. (Don't ask me to provide evidence of that because I can't. :) So there is no need for you to own more than ten stocks in my opinion. The theory about that is that if you bought all ten stocks in equal dollar amounts and if one of them went completely out of business, your portfolio would be hurt to the tune of "only" 10% if the other stocks simply remained un changed and never went up. In these recent months, most all of us would be grateful for only a 10% year-to-date paper loss so that's a real-life perspective. Understanding all of that, from this point going forward I think you need to concentrate on re-evaluating your application of GGaming ideas to your personal portfolio. Fine tune them. Become comfortable with them. Explain them to your wife and children. (Even the young ones like stories about gorillas. :) Become even more comfortable with them. I realize this isn't the sort of detailed recommendation you might have been looking for, but I hope it helps! --Mike Buckley

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