I tend to agree. After researching a stock, I'll usually set a portfolio limit based on the risk-reward on offer, and level of risk in absolute terms. However, if a company does well, kicks goal after goal, I'm always willing to reset those limits higher. My thinking is if the company has done well and de-risked itself, why cut your winners so early? It's done well and earned the right to be a bigger holding in my portfolio.
Conversely, if a stock has done poorly, not necessarily in share price, but in business performance, I am willing to cut my limits if I think the risk has increased, or cut it out of my portfolio altogether.
Codan is part of the former, where it has done very well and I am willing to let it continue to run and keep kicking goals.
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