Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Bob Swift who wrote (47553)	8/27/2005 10:50:28 PM
From: chowder	Read Replies (1) \| Respond to of 206317

>>> On the other hand, I have 63 positions and I am having a hard time managing them daily. I wonder how others position themselves ? <<< Wow! I can't imagine owning that many positions at once. Position sizing, in my opinion, is one the most important ingredients to a successful portfolio. If the position is too large, and you're wrong, it could take away months of profits. If the position is too small, and you are right, it may not have enough of an impact to allow you to outperform the markets over time. In my own case, I put 10% of the portfolio into each trade. Needless to say, 10 trades on at the same time and I'm 100% invested. I used to have a Series 7 license. At the time, I did a study of the various investment styles the fund managers were using. Some of the more profitable funds over time were the "focus" funds. These funds often didn't have more than 20 stocks at any one time. The thinking behind the strategy was that it is very hard to find 20 good ideas, 50 is nearly impossible. So, if the manager of a focus fund wanted to add a position, they had to delete one. They only wanted to invest in their very best ideas and to insure that, they would limit the number of holdings they could have at any one time. Then they would buy a large enough position of their very best ideas and over time, outperformed most other styles of investing. I can't imagine keeping up with 63 at the same time. dabum

To: Bob Swift who wrote (47553)	8/28/2005 2:43:05 AM
From: Paul Senior	Read Replies (1) \| Respond to of 206317

ot: Only 63 positions? What a piker -g-. Well, I will be the outlier here - lol I always say an investor ought to be able to follow maybe 7000 stocks... because 6000 or more of them can be dismissed in a heartbeat as unsuitable for purchase at the price. I hold more than 200 positions. Some positions are relatively large; some are quite small. You put the stocks up by sector on a screen and its not such a big deal to follow them. My side of why I disagree with "pig at trough" investing (which is: the portfolio (trough) holds 30 stocks say, and then get a new idea (pig)that's hungry, so one of the 30's got to be sold (pushed aside) to make room for the new one.): First, best ideas don't turn into best investments. Second, you got to be right twice -- on the buy and the sell-- if the new idea is going to perform better than the stock deselected. For an INVESTOR, sometimes a stock takes longer to work out than expected. That is okay (for an INVESTOR). Third, concentration is a concept sold by mutual funds - "You pay for our good ideas, strong research, our in-depth look at management, suppliers, customers, which we couldn't do if we had so many different stocks." Well my opinion is these guys are not as right as often as they imply. They still have lots of turnover (e.g. Torray fund) and clunker picks. Fourth, what's the matter with these people who only get a few good ideas? Why don't they get more? People are buying all kinds of stocks every day because they see good investment opportunities. Fifth, it is generally accepted that diversification reduces risk - which I agree with but disagree on the number most analysts say is necessary and sufficient. (Their recommended numbers are too low). It is also presumed that "too much" diversification will lower returns. That is not proven. -------- COS.UN being half your net worth is "a bit too risky" only depending on how much your net worth is, what your goals are for increasing that worth, and how much you KNOW about COS and how much you don't know about alternative investments. To me, at some point in the recent past the stocks in this "Canadian Oil Sands" sector appeared to be - if not a reasonable investment - at least a decent bet. For me, since my ability to analyze the details of any particular company in this sector is very limited, I'm not able to pick the best stock. So for me, I have eased into several positions. I started with SU added to it, started COSWF added to it, recently added Shell and Husky. Maybe COS.UN will turn out to have been the best bet, - I'll only know in retrospect. Meanwhile I'm willing to bet that being in is good and getting average sector performance will be good enough. At least better than being out or accepting the business risk of owning only one stock. (I am hoping of course for continued good performance from all the companies and their stocks.) Since I repeat this tactic with other sectors and I prefer ltb&h, you can see how I can arrive at holding a large number of positions. -------- There are traders who say they can only follow a few stocks at any given time. I get the feeling though that when pressed, some of these people will offer, "I trade in my trading account" or "I only trade with a portion of my funds". I am left to guess that there are plenty of these people who therefore might have a substantial amount of non-trading dollars, if not a majority amount, and that these monies might be tied to one or more index funds. So in terms of number of stocks owned, maybe it's actually me who's the piker. -g-.

To: Bob Swift who wrote (47553)	8/28/2005 12:40:47 PM
From: Tommaso	Read Replies (1) \| Respond to of 206317

<< I have about half my personal net worth in COS.UN (some via OST.UN) and ES. >> Isn't that a bit too risky ? <<< Well, no. ES is diversified over sixteen energy trusts, which themselves own only proved and producing properties. And if the tar sands are going to work at all(and they already do), COS is positioned to pass through income to shareholders. Now if management at COS should manage to abscond with half a billion dollars, I guess that would be a problem. They would have a hard time absconding with the tar sands themselves.