@Just_a_guy
Interesting.
I use a follow the value strategy...sort of sniff around what looks cheap, then deep dive into that sector and choose best bets...has led me to mining services a few years ago, then tech 2-3 yrs ago, microcaps last year and now, with retail looking increasingly likely next.
My hit rate is about 60% from memory, but nearly all my losses have been small (the biggest loss in last 4 years was PPL by far, everything else has been tiny, especially in absolute terms) and gains have been disproportionate. Compound returns well over 30% but a lot from very few winners (APT, XRO, MND especially). I also have started to get very large deferred tax liabilities that if I ever need to sell I don’t know what I am going to do and is disproportionately affecting decision making. I try to cut losses pretty early, particularly for low conviction stocks, which helps with both having losses harvested to offset in the future and also empirically works.
Quarterly self audit has really helped as well as implementation of specific rules to counteract my own personal biases. I really need some high conviction stakes that are not tech exposed to rebalance my portfolio, but it is just not happening for me. Let’s see what happens I guess...
I am a bit worried that I haven’t ridden through a really bearish market for a while, but always get heavily reassured when big corrections happen, because downside seems much more limited from here than say 2-3 months ago.
I find microcaps so much easier than large or mid-caps- there is no analyst coverage, the accounts are much simpler and the investment case is more obvious. Additionally there are just so many cheap stocks in that space right now and they are anti-correlated with the market at large. I think it is a major fallacy that large caps are immune from major losses (as IFL shows)- I think retail is particularly disadvantaged in that space due to the possibility of asymmetric information.
Lets hope I can figure out portfolio management in the next couple of years, as I am comfortable with most of the rest of my strategy.
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