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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: OLDTRADER who wrote (155446)	3/21/2000 11:52:00 PM
From: rudedog	Read Replies (3) \| Respond to of 176387

bill - I know and respect your investing philosophy, and had practiced something very similar for years. I believe your returns, and mine, would never have been achieved with a diversified portfolio. But there is also risk inherent in that approach. While I don't recommend the "mutual fund" style, I think that expanding one's portfolio to 5 or even 10 stocks can reduce the exposure to a single issue getting into the doldrums, as DELL did in 1999. And heaven forbid that anyone here should go through what I went through last year with CPQ. Going into 1998, I had nearly half of my net worth tied up in CPQ. I was fortunate to sell about 1/3 of that position in the high 40s. But the rest is still cowering in the back of the kennel... There is no question that a good rifle shot will beat a diversified strategy. It's simple math - if you hold 10 stocks and 1 is a winner, your gains will be 1/10th of what they would have been if your whole bet was on the winner. But the opposite is also true. I was suggesting that Kemble might have reached a point where it would be prudent to build up equity in some other solid, high growth issues - INTC, CSCO, MSFT come to mind. That way, he would have the opportunity to get liquid independent of what is happening at the moment with DELL and would probably still see quite decent returns. My own application of that strategy paid off well in 1999. Going into 1999, DELL and CPQ made up 80% of my portfolio. I sold 1/3 of each in January, in the high 40s. I used the proceeds to diversify (mostly CSCO and INTC). I have shifted over more to option plays for my "high risk - high gain" endeavors. Last year, in raw dollars, I made more on option plays than with equity appreciation. So I just want the base portfolio to "set and forget" with at least a 30% annual return. I got over 40% return on my equity holdings in 1999 - a lot better than if I had been 100% in DELL. So while I think your style is right for you, and was right for me when I was paying more attention to my investments, it's not right for me now, when I plan to spend a lot more of my time doing things that have little relation to making money. RE: MSFT - a bit of a dry spell but finally starting to pay off. I have closed out my MSFT option positions but added to my equity holding. Good luck with that.

To: OLDTRADER who wrote (155446)	3/22/2000 7:53:00 AM
From: GVTucker	Read Replies (1) \| Respond to of 176387

OLDTRADER, RE: As I have "shouted on this increasingly stupid thread "for years"-,diversification is for wimps,if you are really good at picking stocks and know how to manage money you don't need to diversify.A rifle-will suffice- I wouldn't call this thread stupid, but I would certainly agree with your premise that your best chance at truly outstanding returns is with a highly concentrated portfolio. My definition of concentrated may be a little more broad (I am currently long 7 stocks and short 3) but the concept remains the same. Don't discount that there are others, however, that can make great returns with diversified portfolios. In my small sphere, the best performing hedge fund manager over the past year, the past 5 years, and the past 10 years continually has about 100 stocks in his portfolio. Somehow he generates fantastic returns, and my hat's off to him. I would have done better to get out of my business and just give all my money to him, although that wouldn't be nearly as much fun.