Ann: CYBG PLC Third Quarter 2019 Trading Update, page-143

There's a chance the market sees something you may have missed.. assuming the story doesn't change significantly, do you pre-set a portfolio limit or continue to increase as it drops?

Sure, nobody bats 100 on each share they purchase. I may indeed have missed something fundamental which could result in a permanent impairment of the value of the company. So I am always alert and receptive to evidence of where my analysis is flawed.
(But what I certainly do not do is to take my cues as to whether my valuation is right or wrong based on what the share price is doing at any given point in time.)

As for pre-set portfolio limits, that's a good question; generally I continue to buy more as a share drops [*] (with the due re-visiting stress-testing of my investment thesis at all times).

But it depends on the quality of the business: I would happily re-position my portfolio to have, say 15% of it invested in a single company if that company is of truly high quality (of course, truly high quality companies rarely become sufficiently undervalued to justify a 15% portfolio position).

But for a company like CYB, with its somewhat limited track record and the nature of its business model and the inherent risk, I would probably cease buying, irrespective of it falling further, if the stock came to represent 7.0% or 7.5% of my invest-able capital.

I'm probably half-way there at the moment.

Hope that helps.

(But, remember, we all have different investing philosophies, levels of patience and tolerance for risk, so my view should no way be viewed as any sort of monopoly methodology for getting it 100% right 100% of the time.
It's just what I have found to work for me over the course of my investing career.)



[*] If I like hamburgers at $5.00, then I like them even more at $4.00
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