Agree w/Jurgis Bekepuris. It depends on one's risk profile, one's goals, one's patience level.
For you --- given I know nothing about you except that you seem to be struggling with the issue -- I'll assume you're a young guy just starting out, whose eyes light up with the idea of getting results of the "greats" (Burry??) -
So my guess is 3-10 positions for you. My reference is pp 242-243 of One Up on Wall Street: "In small portfolios I'd be comfortable owning between three and ten stocks." (P. Lynch)
My opinions:
1. Being comfortable is overrated if you want to make big bucks. Overrated in general.
2. Regarding Lynch, the other "greats": There's the element of survivor bias. You don't hear much of the people who kept a few stocks who weren't successful.
3. "He (Klarman)'s only had a 10% position 10 times in the last 20 years." Could this also mean he started with a "3-6%" position and as the position doubled or tripled or more in value, even after selling some shares, the position had just grown to be a 10% position. That would be a "let your winners ride and cut your losers" aspect, which I would view as a tactic within the framework of how many different stocks should I optimally hold in my portfolio.
4. For me, I like to believe (although perhaps just fooling myself) that I control risk by position size. Starting positions, tracking positions, low conviction/cigar butt positions, seemingly high-risk stocks--- their position sizes in my portfolio are smaller than other stocks there...... Uh... have I confused what's being meant by "ideal position size within a portfolio"? My point now seems be there's no one ideal for "position size". That could be different from "ideal number" of stocks. For that too, it depends on the individual imo, as I was referring to in first two paragraphs. |
