Kudos for putting it all out there. Much more scientific than anything I do.
As weve previously discussed i‘m pretty inexperienced and haven’t been through the economic cycles so take All I say with a handful of salt...
Im not sure I can add much though, my basic thinking is that I like looking at companies and financial reports and I want a return greater than the cost of my home loan (otherwise I should sell the lot and pay off the house) which is only 3.7% after tax.
Im in a very fortunate position being relatively young. If gfc Mach II hit tomorrow and corporate profitability crashed and my portfolio dropped by 50% I’d barely flinch and in some ways, long term, it would probably benefit me.
Having said that, paradoxically, I certainly sleep better with a diversified (rather than concentrated) portfolio. I currently own a share of 40 companies.
Ive only been ‘investing’ for 4 years I recently audited my performance which was complex due to vastly different capital invested in different years and I’ve return just over 50%pa pre tax. I’m certainly not fooled by randomness - there were a lot of fortunate decisions I wouldn’t make again. My portfolio is becoming more conservative by the day. The vast majority of my performance is due to a small number of companies (Companies I own or have sold at a more than 100% gain off the top of my head include bid, dna, mem, asn, sya, kme, pls) though but I feel I need the diversity to pick up those large wins. I use sentiment which is hard to measure but as mars and others have said, when those who know the stock best, hate it, it’s probably a good time to buy. I won’t buy anything the has hype. I’ce lost out on apt and xro because of tI treat it as lots of small asymmetric bets rather than a few big high conviction bets (slx and evs are recent examples). My largest 5 positions are ifl Cgf evs lyl and Sdi
When i I look at my mistakes - it’s usually when I under estimate the market and think I know better. Buying sgh was a great example where I thought the market was wrong, and I trusted management. How could a pile of lawyers fail to make money? How could their estimates be so wrong. I now need to look over years worth of guidance and results to form a view on management. I’ve sold too early, sold too late etc as we all have but it’s usually when I’ve invested in something where others have an informational or professional advantage that things haven’t worked out. If it’s a relatively basic company where all the information is freely available I’ve tended to do better.
clearly may strategy wouldn’t work as a money manager!
