Hello everyone,
I just thought I would write to everyone regarding portfolio allocation and share my views. This will be a different situation for everyone.
A great deal has been written about
how much of total net worth should be put towards an opportunity like paradigm.My investment strategy has always been to take
concentrated positions in companies where I believe there is asymmetric upside.
From my experience, these companies take time. On days like to today, where the share price lowers on a positive announcement, represents a huge opportunity to
build a sizeable position. On a day like today, short term traders and new investors may see this as a delay in the timeline submissions to the TGA or as an opportunity to downramp the price. But lets be honest - they aren't building a sizeable position to generate serious wealth. What investors forget is that
value and timelines rarely intersect. These things build over time, and at some point, paradigm will do extremely well based on the proof of science, the trials results we have seen, and all the potential applications. My direct family are mostly built of top medical professionals that have also sizeable positions in the company - but also are unique in that they understand the commercial potential. They didn't see the same commercial potential in mesoblast, race oncology etc. They did see it in CSL and that's why most of them have done well.
When assessing this, nothing in the company has ostensibly changed, in fact, the asset is being more and more de-risked as we speak.
To put our community at ease, I can disclose that I have put around 16% of my net worth to this opportunity - so around 1m shares of Paradigm. In terms of equities, that is around 30% of my equities holdings. I have
built and accumulated this position on days like today, that is, taking advantage of what the general public fail to see, is a boon for an investor that is prepared and understands the asset inside and out. In short,
figure out how much you are willing to allocate and ruthlessly stick to this - for e.g. I wanted to put 30-35% to this stock and 60%-65% into other concentrated positions. Once I did well in some other positions, I sold and put more into PAR to get to my allocation. Of course, I sell small bundles at some points and de-risk my holdings if I can - but I always try to
maintain that weightage as a percentage of my net worth.I try to structure my buying on days like this, and keep holding my nerve when there is a small malaise - which invariably always happens when new investors take up any stock.
All will be good. I'm very confident in Paradigm, as much as I was in CSL. Ironically, this is a typical biotech share price chart for a very ATYPICAL company. That translates to an immensely undervalued company. I am certain that most new people coming here will read and decide for themselves.
Good luck and stay safe.
(20min delay)