Iron ore price, page-32064

All fair points except his Minderoo charitable investment company holds nearly a billion FMG shares and all its proceeds are returned to the charitable causes and Andrew F has taken the time to introduce his children to be involved from now into where they distribute their funds. People like Warren Buffet have said the same thing, leave your kids enough to be comfortable but not enough to do nothing with their lives. If you take that going all in is a sign of poor risk management you would never see people like Andrew Forest and Nicolas Molnar found their companies and chase their dreams.

I did not go all in on a speculative stock investment until it showed signs of profitability and explosive growth and then I rolled most of our portfolio into that one stock. I know its prudent to spread all your investments around and not have more that 5 or 10 % in a single stock in case one turns out to be a BIG, ISX or SGH. It protects your portfolio if you end up having a bad egg but what does it do if you have a ten plus bagger amongst them and it only makes up 5% of your portfolio. It depends on your risk profile, your life stage and what you have behind you that allows you to take a big punt without being wiped out. I took a punt and let a stock grow until it made up 90% of our portfolio and let it run until it made sense to lock in profits and diversify.

I looked at what to do with a proceeds of the final parcel of shares from that multibagger in recent times that left us around $1.6m. I could of gone out and bought a nice 5 bedroom investment property with a sea view and pool and get a $1500pw return. After paying rates, land tax, water rates, landlords insurance, letting fee and maintenance plus management fee its lucky to leave you $1100pw.

The same amount invested into FMG now leaves us over $9000pw if you include your franking credits. Even if over time the price of iron ore halves and you lose a bit on your original entry and divis are slashed the returns in my view are too enticing to ignore. I have shares in another 17 companies but none in my opinion has the massive returns that the current IO offers or the prospect of big future returns from its FFI arm.

You can play it safe and still have a very comfortable retirement but if you want to chase your dreams and have the willpower, foresight, strength and luck to do so then you sometimes have to step out of your comfort zone and invest most of your hard earned into just a single or a handful of companies. Its not a investment outlook I would recommend anyone to follow but no one on this forum who has made serious life changing returns or people like Andrew Forest have achieved their dreams by playing it safe.