Thanks. It depends on ones style of investing.
I own a concentrated pf of 15 stocks max (currently holding 14) and strive to hold stocks for fairly long periods of time (i.e. as long as the thesis is intact). Within these 15 stocks, I have ~9 stocks that are coffee can candidates (aspirational hold period of 10+ years) and the rest are tactical bets ranging from 2-4 years (if these perform well, I can move them to my coffee can candidates or sell them).
Being a concentrated pf, the bets usually range from 2-5% of my entire pf. In the overall scheme of things these work out to be decent sized bets. In a scenario where the stocks don’t go anywhere or have slight up moves, I keep averaging, especially if it goes down (e.g. Divis, Info Edge etc). However, if any of these stocks move up and if they fetch me a few bags, I tend to then hold and let the story play out. The benefit of betting BIG does wonders to your pf returns in scenarios like these and because you get over exposed, you don’t need to really add more, unless you want to concentrate your holdings further and take on more risk. That is a personal choice and preference, but it isn’t for me.
Coming to Elxsi (was 4% of my pf), at its peak, the stock became ~15-16% of my pf. I sold a little (about 10% of my Elxsi holding) and over time I added to my other positions across the pf - stocks, MFs, FDs, EPF etc. This led to the over exposure to the stock come down and also let me hold on to my still fairly large position here. I intend to hold on to the stock and hopefully see my fairly large position become bigger (fingers crossed). So, I’m operating on the premise that 10 became 100, can the 100 say double in 5 and double again in another 5, that would mean 100 going to 200 and then 400, making this a truly big win! (one can hope )
I have the conviction in the company to be far bigger 5-10 years from now and thus my decision to hold even though there are many other companies growing at a faster rate. I’d also like to share my favourite quote with you (borrowed from Thomas Phelps) and the maxim I try to live by in investing,
*To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.” Patience is the rarest of the three.
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