Always interesting to hear how other think of this. In my own personal portfolio I will have a position as large as 50% but when it comes to my family’s RRSP account I won’t usually take a position size that is initially greater than 10%. I find that 6% to 8% is my initial position size but it has never been a hard rule.
I am OK with holding a “great” company that has grown but I wouldn’t let a “cigar butt” setup grow beyond 20%. This is especially important for cyclical or commodity type businesses.
One thing I know with certainty though… everyone else on Substack seems to have a plan to find “multibaggers” but I kind of just keep plodding along.
I don't know how I would handle managing money for others. I barely keep myself in check, I doubt I would be able to handle questions or concerns from others. Especially given how lumpy my style is.
The type of company and management determines how concentrated the portfolio will get. I agree some NCAV company will never be 20% of my portfolio.
It is definitely more stressful when doing it for family members but they have been very grateful.
When I started most of the money was managed by professionals but over time the portfolios that I managed consistently outperformed so ultimately all the money got moved over (this took place over several years).
The fees was a whole other issue. The impact of a $9.95 trading fee compared to an annual 2% management fee plus mutual fund fees was extremely significant.
The issue of “risk” with professional advisors always surprised me. You could find a profitable company with no debt trading below book value on a single digit P/E and they would be “concerned because it had a high beta or some other BS (share price under $5, market cap under $500 million, etc.)
The periods of big drawdowns were very difficult but fortunately I went into it with good relationships. There were other family members who wanted me to invest for them but I had to say no because they didn’t have the temperament for investing.
Always interesting to hear how other think of this. In my own personal portfolio I will have a position as large as 50% but when it comes to my family’s RRSP account I won’t usually take a position size that is initially greater than 10%. I find that 6% to 8% is my initial position size but it has never been a hard rule.
I am OK with holding a “great” company that has grown but I wouldn’t let a “cigar butt” setup grow beyond 20%. This is especially important for cyclical or commodity type businesses.
One thing I know with certainty though… everyone else on Substack seems to have a plan to find “multibaggers” but I kind of just keep plodding along.
Appreciate the comment.
I don't know how I would handle managing money for others. I barely keep myself in check, I doubt I would be able to handle questions or concerns from others. Especially given how lumpy my style is.
The type of company and management determines how concentrated the portfolio will get. I agree some NCAV company will never be 20% of my portfolio.
FWIW I am also just plodding along.
It is definitely more stressful when doing it for family members but they have been very grateful.
When I started most of the money was managed by professionals but over time the portfolios that I managed consistently outperformed so ultimately all the money got moved over (this took place over several years).
The fees was a whole other issue. The impact of a $9.95 trading fee compared to an annual 2% management fee plus mutual fund fees was extremely significant.
The issue of “risk” with professional advisors always surprised me. You could find a profitable company with no debt trading below book value on a single digit P/E and they would be “concerned because it had a high beta or some other BS (share price under $5, market cap under $500 million, etc.)
The periods of big drawdowns were very difficult but fortunately I went into it with good relationships. There were other family members who wanted me to invest for them but I had to say no because they didn’t have the temperament for investing.
Great read, always good to read about the logic behind portfolio construction