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

To: Spekulatius who wrote (74253)	11/14/2023 10:51:06 PM
From: Grommit	Read Replies (1) \| Respond to of 78777

I don't think that you should change your investing approach depending on the size of your portfolio. You should mainly own somewhat predictable, undervalued companies, and possibly a few with more potential (in both directions?). Slow and steady wins the race. Compounding takes time but is quite effective. Checking my numbers. Since 2003, even with poor 2008 and 2022, and 2023 slightly negative, 13.1% compounded annual return. NYSE 5.8%. >>Try at least for 30%- gains, not measly 10%. Going for such small wins is not going to get you anywhere

To: Spekulatius who wrote (74253)	11/15/2023 11:43:44 AM
From: petal	1 Recommendation Recommended By sjemmeri Read Replies (1) \| Respond to of 78777

I disagree with the concentration part (unless is good at it (with historical proof to back it)). Most ppl are famously bad at "picking winners". Even if you're good at it, sometimes you have massive down years with a less-than-three-stocks portfolio. Even Munger had that during the 70's, which caused him to close his fund – it was too unpleasant even for him (mostly because of the complaints from the funds' investors though). If you know that you can handle that, fine. Most ppl can't. (No matter how "small" the portfolio size, if it's a large % of your total capital, a massive loss of portfolio valuation is enormously hard for most people psychologically. (Then again, though, if one is wired that way, one probably shouldn't invest in stocks...)) And nowadays, with brokerage more or less free, why not buy several different co.'s? At least moderate diversification – say 5-6 stocks at a minimum – I think is prudent. Try at least for 30%- gains, not measly 10%. Going for such small wins is not going to get you anywhere, because one of those times, you are going to be stuck with a trade that generates terrible losses and negates all the small gains one may have had. This I agree with mostly – though if a stock rises with 10 % within a week or two after buying, then that's a different story. One constantly has to translate gains into CAGR, I think. Still, it is probably a good idea to hang on to a stub, as Paul Sr. does (and I myself have begun to do), as one sometimes winds up having sold way to soon, when momentum takes hold of a stock and turns it from a hated, "P/E 5 at historically low earnings" stock into a "rising sales + rising profits + rising earnings multiple" stock. Those stubs can become quite valuable indeed then, even if it's just a tiny %. It's sort of like an option, I reckon.

To: Spekulatius who wrote (74253)	11/19/2023 10:21:06 AM
From: Rarebird	Respond to of 78777

<< Going for such small wins is not going to get you anywhere, because one of those times you are going to be stuck with a trade that generates terrible losses...>> Successful swing traders keep those "terrible losses" to a bare minimum. To be sure, sometimes they cannot be avoided due to a poor earnings report or market reaction. What I often do is lighten up my position by a half ahead of an earnings release to minimize the impact of a "terrible ( paper loss) loss." I did this with WMT recently. Some people like to buy weakness and average down. I find that very dangerous. I only have averaged up over the last twenty years or so. I buy strength and short weakness.