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

To: Terry Maynard who wrote (3653)	3/26/1998 7:01:00 PM
From: James Clarke	Read Replies (2) \| Respond to of 78659

Portfolio management. I agree with Michael. I used to own 15-20 stocks, but then cut it back to 8-10. That's a number I can keep a close eye on, and it makes me really do my homework because I might have to sell something I like to buy a new one. When I had 15 stocks, I figured, what's another tiny position. I'll finish my research later. But with just ten, each one is a big investment, so I double check the numbers. The first rule of investing is "know thyself" That's how I think. It may not be how you think. And if you're worried about a major disaster wiping out a big chunk of your portfolio if you are wrong, then you will also miss the opportunity to hit a home run when you're right. I had 25%+ of my portfolio in St. Joe for most of 1997 and had about 20% in Philip Morris in late '96 to early '97 when it went up 40% in three months. That made up for my losers and then some.

To: Terry Maynard who wrote (3653)	3/26/1998 7:54:00 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78659

Ha. Well I disagree with all of you! 3-5 stocks or 9-12 say, would be okay for someone really trying to catch the pitch and make a lot (and willing to assume a higher risk IMO). 10-12 positions way too risky for long term patient value investors. Growth investors, maybe okay -- all you need is a couple of Cokes, and MO's and hold the heck out of 'em. For value investors, got to always be planting seeds. Note Mike's portfolio. No stocks reported bot prior to '98. (No time diversification.) Al Frank is not a good example to use -yes, he's associated with buying large numbers of different companies - 75, 100, maybe more - lots of time diversification, biz. divers., but his portfolio results are heavily skewed by large amount of margin. (His example doesn't proove the diversification case IMO.) Let me ask you pig-at-trough investors. If HWP dropped 25 points for some superficial reason (say the HWP Pres. had a heart attack --- that wouldn't be superficial to him though -g-), what would you do? Sell a position you've researched the heck out of,and have owned for a while, (and so has good prospects per your evaluation) and buy HWP? Substitute a potential better value, for one you already have evaluated? That'd only be okay IMO if you fit in the category in my first sentences above. But for value investors - I believe Graham says one can make an adequate return with value stocks, not necessarily get rich. So if switching, my opinion is that it is not value investing to give up one value stock for another. JMO. Paul