Yes, madharry, that's basically what I am doing also. Essentially bet more the more confident I am. Sometimes that confidence only extends to a few points outlook for the stock. I'm confident that DG, now at $189, will hit $200 again. They're the dominant retailer in small communities they serve, and their business is not likely to go away. Otoh, p/e is around 20x, and that could collapse in a market downturn. I'm willing to bet more though on the gain I expect here though, than I am betting in total with spec plays such as TBIO, PINS, DT, ITCI, and others. My confidence is low and my bets are small there. So small that if the companies go bust, it won't much affect my portfolio. Unless... these companies's stocks decline, and I convince myself, without knowing the business, that I should buy more shares. Decline into oblivion, and a small dollar loss initially, becomes very signifcant at the end. That's the big risk for me with these spec plays.
I also want to say, in my view, there's a difference between my confidence level and my best idea. Just because something might be my best idea, doesn't necessarily mean I'm most confident about it. |
