Re: Over Diversified Portfolio?
First, thanks to all the public and private welcomes and best wishes. And thanks to all who took the time to respond to my first message.
Mike, I'm puzzled and curious about the idea you presented that my portfolio was at risk of being "overly diversified" if I invest in more than 10 stocks. Bruce, you also seemed to advise adding to my current position rather than opening new positions.
So help me with the following scenario:
As stated before, I currently own seven stocks: CSCO, GMST, INTC, JDSU, QCOM, SEBL and SUNW. Most would agree that these are good, solid, and diverse gorillas (and a king).
Let's say that over the next year I continue to be interested in storage and decide to add NTAP and/or EMC. I was very excited to read the Paul Johnson interview (http://www.internetstocks.com/Mindshare/mindshare_johnson.html) and want to explore possible positions in at least Juniper, Redback and Brocade. Sandisk continues to interest me. Based on my recent Motley Fool Rule Maker Seminar, I think Yahoo and Oracle are worthy investments. I might like to consider a B2B play and invest in Arriba and/or CommerceOne.
So, would you say that adding 5-7 of these stocks over the next year is:
1) Terrible! This is now an overly diversified portfolio. Being overly diversified will likely <help me fill in the blank here> and other terribly nasty things.
2) A waste! This portfolio is already balanced perfectly. Adding these stocks has no benefit.
3) Terrific! These are great companies, most of them are gorillas or leading gorilla candidates. They will all likely perform well over time. As long as you have the time and energy to keep up with all these stocks and sectors, more power to you. Maybe one of them is the next Cisco.
4) <fill in the blank>
I hope you can see what I'm trying to ask.
Thanks,
Darby |
