Brendan & DomumSpot on as usual my friends. Hit the nail on the...

Brendan & Domum

Spot on as usual my friends. Hit the nail on the head...again!

I totally agree with what you are saying here.

There is one thing I would like to add to the discussion that could help some people for the future who have felt themselves burned by this experience.

With all that you are saying in mind, I feel that it is best to take small positions in a number of these stocks.

What is really concerning is reading these threads you get the impression that some on here are way too overexposed to CCC.

I would say 5-10% max should suffice for any stock, let alone stocks at this end of the market.

If you expose yourself too far to any one stock and end up in danger of "falling in love with it" you will of course become emotional when it doesn't go the way you believed it would.

Also good to hold a good cash balance, and perhaps move the line on that with the broader market i.e. pull out on the highs and move in more on the lows.

I personally try to give myself 20, 5% slots to work with including my cash balance so fully invested I would hold around 20 stocks.

Here is a rough idea what I am saying:

Major market bubble top: 100% Cash

Toppy Market 25% stocks (5 stocks) 75% cash

Normal Market 50-70% stocks (10-14) 30-50% cash

Market capitulation 80% stocks (16) 20% cash


Just an idea, do what you like with it, but I really do find that working something like this helps to keep the emotion at bay and gives more chance to try and take my time and pick better trades.

Working like this and a stock like CCC doesn't pan out as expected:

a) Doesn't matter especially if others go up

b) You can add another few percent when it drops

c) Little emotion

d) You can focus on other good stocks rather than getting locked in to one idea.

e) etc...


(Another thing, to be heavily invested in one stock like this is risky enough but to be heavily invested in options on a stock like this is just downright irresponsible IMHO)

Really, good capital management at this end of the market is fundamental - and I am talking from experience having made all of the above mistakes in the past.