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

To: Jurgis Bekepuris who wrote (54697)	1/3/2015 4:05:46 AM
From: Elroy	2 Recommendations Recommended By Jurgis Bekepuris Mattyice Read Replies (2) \| Respond to of 78624

I have (had* - until today) over 60 stocks.* I think rather than hold 60 positions in nearly equal weight you are better off just buying an index fund. With that number of stocks I think it is really really really hard to beat an index by more than 2 or 3 percent, and that is plenty hard. It's not worth the time it must take to learn 60 stocks well enough. You should probably consider about 1,200 stocks and choose the best 60 - who has that time unless you're working on it 8 hours per day? I doubt that I could brave to put 10%+ of portfolio into such special situations though. Yeah, I understand it's tough to do. But this has been what has worked for me over the past 15 years. I would like some stock, know it well, and then it declined 40% or something, so I would put 30% of my savings into it. About five or six picks like this turned into 3 baggers to 10 baggers. Those 5 or 6 trades (over 15 years mind you) have generated probably 90% of my investment profits. The rest of the time when I would try to take on 20-30 positions of equal weight, they all wound up balancing out (some up, some down) to nothing meaningful. I don't have the numbers, but I'm sure it's the case. It was easier when I was starting out and had less money. It's harder these days to plonk 30% of savings into a single stock. But if you want to beat the market by 10% or so, I think it's the best way unless you have so many hours that you can actually find 60 awesome stock picks. I can't, I have trouble these days finding 2 or 3. ======= Gotta say, though, I like PSEC down here, $10.40 last reported book value, share price $8.40, recently cut the dividend to a level (8 cents per month) that they can easily pay, and yielding 11% or so, plus the three upcoming spinouts of controlled companies that are supposed to increase PSEC's valuation. You're not going to get a double or a triple out of them since they aren't an operating company, but for income, and some capital gain, I'd be happy putting a good chunk of cash into them. In fact, I have.