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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (41263)	1/30/2011 1:30:57 AM
From: Jim P.	Read Replies (1) of 78625

Your words are accurate. My portfolio is and was concentrated. My needed retirement assets are not. I have a pension and a 401K that are actually enough. I have made outsized returns with a taxable account and an IRA because I could afford to take the risk. I plan to use the extra to retire a little bit earlier than I would have. Is it for everyone, certainly no. But if you can take a risk with a portion of your assets by concentrated bets and have an interest then I think it is ok to go against conventional advice. Every small business owner does the same thing for a while and taking an ownership position in a security that is outsized is the same in my opinion. My advice to most people is diversify among dividend payers. There will be some on this site that swinging for triples and home runs at some point makes perfect sense to me. The difficult part is stepping back and hearing the wise counsel that you are giving when the triples and home runs are working. I have been investing for over 20 years and realize my weaknesses and strengths. Some expensive lessons for sure but I have gotten much more patient with capital and tend to do better then I was ever hoping to do. Personally I think part of the problem with most investors is they trade too much because they are speculating only instead of looking at investments as an ownership stake. Quality management and quality assets become easier to spot with practice but certainly I do not have time to keep very close track of even 10 companies. As far as the companies I am invested in currently the only one that I think has a likely chance of being very undervalued is Sandridge and my position is still small. If it becomes very obvious that they have turned around there will be plenty of gains left to increase the position. APL bottomed at$2.50 but I did not buy until $8 when the turnaround was clear. 9 months of watching and research before I pulled the trigger. Lynn energy was easier when there were crazy prices in the meltdown. I sold NFLX to buy Linn energy and am happy with my choice. Linn energy and Atlas Pipeline are not overvalued IMO but would not be such large positions buying at todays prices. I am happy to get the compounding at my cost basis with increasing distributions so I have no reason to sell today except to diversify and even then would keep some of both because the assets are so long lived they fit my criteria for long term holdings. Thanks for your thoughtfully worded post. Jim

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