Hi EB. I wouldn't scoff at diversification provided we know what we are doing. In investing, a little knowledge is a dangerous thing.
Allow me to elaborate. When I was younger and more naive, I used to think I knew everything, conducted superficial research, invested on a hunch and concentrated my purchases. In the beginning and in the midst of a bull market, it worked and I made a lot of money. I then made the cardinal mistake of mistaking a bull market for brains. Is it any wonder hubris set in and when the Asian Financial Crisis came round, I blew up majestically. Capital management wasn't my strong hand.
Ironically, my recovery was also due to concentrated positions. The point was hit home: concentrated positions are a double edged sword.
What's my point? Getting into the right business is paramount. Foremost question in my mind is always, is the business about to embark on the cusp of a S curve growth rate? In other words, how close is it to the inflexion point. In EMC's case, We are within two years towards the decentralisation of WTP leading to the adoption and penetration of MABR by Chinese municipals.
My second word of caution to myself is always question my assumptions. Don't get drawn in and, at the right time, be a contrarian. The key words there is "at the right time". That is an art more than a science and it's something I have not mastered. Don't ask me what that point will look like in EMC's case. We only know about it after the fact.
Thanks for the banter. It seems reading your responses always seem to trigger some thoughts in me. Regards, ywtoh.
FLC Price at posting:
92.0¢ Sentiment: None Disclosure: Held
