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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (51237)	4/7/2013 1:40:51 PM
From: E_K_S	Read Replies (3) \| Respond to of 78472

Hi Jurgis - Making a Portfolio One Stock Value Bet We talked about the size of a one stock "value" bet in a portfolio. My limit is never more than 10% of the portfolio in any one stock and for a new idea, I typically start out a 0.5% portfolio position "exploratory" buy. As I watch and study the company I will add additional 1% Buys and typically will grow the total position to no more than a 3% portfolio position. On average I keep the position small around a 2.5% portfolio position and try to grow it to a 5% portfolio position. However, there has been a lot of discussion on building up a few large "Value" positions and I was curious if you were in that camp? So how big is BIG? More than 10% of the portfolio? Do you scale into that size or do what Ben Graham does, go all in w/ one or two buys in no more than 5 trading days. In all cases, I never have exceeded my 10% position rule (even w/ a mutual fund). Any time a position exceed that amount, I peel off shares and distribute the proceeds into other stocks I own in my top quartile group. Maybe some of the other Value Investor Survivors can speak to the "size" of the Value bet and rules that you have used to manage the risk. I never use margin either but I suspect when one makes a very large portfolio bet, stops are placed so on any bad news you can exit the position. For me, it's not worth the potential portfolio risk exceeding a 10% portfolio position. My current asset allocation is as follows: Top 10 positions = 39.4% of the taxable portfolio Top 5 position = 26.4% Position 1: CVX 7.8% Position 2: BHP 5.4% Position 3: COP 5.1% Position 4: MHRpD 4.5% Position 5: GSTpA 3.6% Positions 6-10 avg between 2.5%-3% of total portfolio EKS