In my view, position sizing can be directly related with concentration. If you have let’s say a fixed amount per month to invest, you will have higher position size if you have lesser number of stocks compared with higher number of stocks. So, I think concentration is the key. Furthermore, with lots of stocks, it becomes difficult to track and monitor the performance.
@Mudit.Kushalvardhan , I agree with your views. If you have multiple potential multibaggers in the portfolio where you have conviction and you bought them cheap, then nothing like it. However, you can’t expect different stocks to give exact same returns as it depends on a lot of factors. If any one has even slightly higher future potential, it’s better to put all your money in that stock rather than dividing it by two.
2 x 2 framework Goofy mentioned is position size vs concentration. But I think both are interrelated and in my view concentration is the key.
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