Thanks @hardik_shah1 for asking.
I am still not sure about the optimum percentage for the high conviction stock and I am still observing myself and learning.
All the comments below are based on my observations of my behaviours and I like experimenting.
I manage multiple portfolios - my sister, my mother, my father and mine.
I don’t remember putting more than 7 percentage at buy price of my net worth at any time in any of the stock in my portfolio. Reason behind not putting a lot of money in one stock is that I am not confident of my abilities.
With time I have started taking bigger position in stocks at my net worth level as I am learning with time.
I use SOIC allocation framework of 2-4-6-8 as the starting point for deciding allocation.
I don’t understand the companies in too much depth to take 8 percent allocation at the buy price of net worth. Though someday, I aspire to reach there.
Mostly I don’t hold the company with 2-3 percent allocation at buy price of my networth due to efforts invested in tracking and understanding the company. It either scales to 4-5 percent or I take the exit as my understanding improves.
The other reason is that I don’t get many stocks to invest.
I have 5 stocks in my Indian portfolio.
Other than 5 stocks, I also have 1 share of protean just to understand the business through the investor relations.
In my US portfolio, I have underperformed the US nasdaq 100 and due to tax complications, I am not looking forward to put more money in US stocks and hence not discussing about its allocation.
Not discussing the portfolio allocation of other members of my family due to privacy concerns.
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