Why I'm now convinced MND is a compelling buy, page-24

@travelightor

Appreciate the response, it is quite enlightening to know what other investors do with this sort of stuff.
I am nowhere near as concentrated as you, but I do have a very strong gradient in my position sizing (with 2 largest positions at cost accounting for 20% each of total portfolio cost, compared to my smallest position which at cost was just over 1%.

My internal controls are estimated downside of <20% and estimated upside of >50% within a 2 year period and like you am generally getting quicker at getting rid of the deadwood if it doesn't follow the investment thesis *almost* irrespective of price (occasionally they may be severely mispriced and need a bit of patience to get an optimal exit price). I do think that the stocks with the greatest asymmetric risk/benefit equation perform most strongly both in terms of time to realisation of return as well as magnitude (which obviously makes a lot of sense, but not sure everyone consciously thinks this way). I am somewhat agnostic about the type of investment this can involve (ie if something seems like a good opportunity, even if it is somewhat different, I will explore and consider an investment). This approach is probably not the best, but it does have the advantage of expanding my investment and investing education, which is priceless (at least to me). I do find that the portfolio moves sideways and then has big step changes as well, and also find that I don't get too many big negative periods even when the market is tanking in the absence of a meaningful deterioration in actual business performance - I must confess that this is anecdotal and I haven't been actually tracking this. I also find that it is often a few stocks that do the heavy lifting in terms of portfolio returns. It will be interesting to see how it pans out after a few more years of data with some rigorous analysis of what works and what doesn't.

You talk about price anchoring which is a common heuristic leading to cognitive error and whilst I don't think it affects my downside price assumptions much, I do believe it affects my upside price assumptions. In many cases, I should be averaging up but I find it almost impossible when I remember the prices that I initially got something at. Conversely I am still quite happy to have missed opportunities (where I never pulled the trigger), so it is a limited error and one I will have to focus on in the future. My hard portfolio limits at 20% are possibly something I should reconsider as even with fairly conservative estimates under the Kelley criterion I could probably upsize my largest positions.

Thanks all for the conversation, has been enlightening. Will need to start threads about my other great topics of interest....finding the hidden gems/ stocks at inflection point (more in small cap space) and exits, at some stage.