I have over 200 positions now. Really not that difficult to monitor when you have computer access and Yahoo. If you group stocks by sector, you often see stocks in a particular sector moving together on the same news. Of course if there's company specific news, and it's positive, you get a sector-beating pop in that particular stock. Conversely, a drop on bad news.
I want to own stocks at good prices. Whether that's a good company at a fair price or a cigar butt at a very good price. Then I expect that I will try to wait until management & employees deliver some positive performance (in the case of cigar butts),or they continue to deliver decent results (i.e. for those good companies). It's my belief that following a particular stock or business too closely is not that helpful. I do like Dale Baker's highlighted quote from the Al Frank Fund on this:
Message 19530556
For illustrative purposes, I'll take a specific sector, and go through some of my ideas or reasoning. In the insurance/banking/finance areas I have over 35 positions. If we look at one of the better known companies that has been discussed here several times, Washington Mutual, we would generally see that the stock's had its ups & downs, but the company has pretty much delivered on its promises. If somebody only had this one stock in the sector and held it for the past few years as it was mentioned here, I suspect they'd be doing okay now percentage-wise. Similarly for most of the other companies discussed here such as ABK, MBI, C, BBX, MAXF, etc. At several points on the timeline there were places where the stocks might have been bought or sold. If not bought, it turns out to have been an opportunity forgone. If sold, it ALSO turns out to have been an opportunity foregone. Because if the person sold, although they might say they bought something holding better promise, they nonetheless left money on the table with a stock they already knew something about.
1) If they owned any of these stocks: To me they could have compromised - rather than swap out for something else, they could sell only partial amounts and let the company managers continue to work to deliver more stockholder results. Or better yet, imo, the stockholder if he/she had funds, could just hold the position and go find something else to invest in. So, for example, I have long-time small holdings in C and BAC, and these are stocks I normally pay scant attention to. (Although the Fleet merger with BAC has been an alert for me to increase my BAC position.)
2) If potential investors did not buy any of these stocks: Assuming they could, why did they not? Even for the most tiny amounts the percentage gains would have been substantial. And even with such few shares, if the portfolio has a few such small positions, those 20, 50, 100, 200% gains add up. Examples here would be AACE, WRLD, WES, ACF, etc. etc. that an investor might've made just small bets on.
Now I see an opportunity in dominant AIG. Selling for an uncharacteristically low forward p/e. This stock should be bought now to see stock gains in '04 and/or '05 (imo). I am upping my position, and it won't be a problem for me because I've held small amounts for a few years, and I've learned something (not that much though) about the company because I'm already in the sector. However, if I only had 15 or 20 or 25 positions and I believed in pigs-at-trough investing (only so much room at the trough; something's got to go to make way for a new buy), I would be reluctant too to make a 6.6% or 5% or 4% commitment to this stock. Especially if in order to buy, I had to give up something elsewhere that might, in this booming market, still have potential too. |
