Over the years I have tinkered with having many many stocks to owning less than handful of stocks. Through the last 3 to 4 years - I started buying small quantities of stocks I wanted to call as 'tracking stocks' - just enough to keep an eye on, but not big enough to pinch if it hurts.
Over the vacation time during Christmas and New-year - I started re-looking... if this strategy was really worth the 'buying'. Especially if the tracking portfolio portion starts creeping upwards of 80.. or 90.. with all the nice screener tools available online - the big question was: is it really worth the money to buy something for the sake of tracking..
I think it becomes painful to see small amounts of money get painfully low / out of sync... also especially if I have no further interest in doing any research on those companies. Even getting 5% of portfolio doing bad because of a stupid idea of 'tracking' seems to be a waste of good time over bad ideas..
Its good to have the best 3-4 stocks hold 80% of portfolio (obviously changing percentages over time) and rest 20% in 5-7 stocks. This seems to be the ideal sweet-spot for me. Usually I have seen that I am highly reluctant to change much on the 3-4 stocks if all's going well. The 5-7 stocks on the periphery are the ones to read more on... maybe learn more about the industry.. how they make money, how the best-in-class companies WW make their money.. read books about the industry.. some biographies.. autobiographies... and the like. I need to do more of this. The dilution which had creeped-in is doing more harm than good.
So.. my goal for the year is to think more deeply before jumping.. and to cut down on crap. Cut the crap.
Ciao till next time...Harsha
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