@visuarchie , Hi Vishwanath ji…sorry took a long break of 11 days of asking you my stupid questions. I was on a meditation course. Back with a new zeal to pick ur brains…
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We are following this momentum strategy. What we should call ourselves, momentum investors or momentum traders? Which title suits better? And is there any difference?
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You have mentioned many times that u selected 20 stocks or 25 stocks to diversify and balance the concentration risk. This is the same argument given by value investors as well. But we are going against many of the cherished notions of value investors…like investing at 52 week high, or All time high , or selling even in a week etc, which value investors cannot do even in their dreams. Then why follow their diversification rule? Cant we just invest in Top 10 stocks? Have you checked the effect of top 10 or top 20 and seen a drastic volatility? By following this strategy, we are already playing with fire, then a little bit of 5 or 10 additional stocks, will it make any difference in handling risk or volatility?
My specific question is because on this monday , I am.thinking of reducing the number of stocks to 10 instead of current 15 of each small cap and microcap universe, thus totalling my stocks to 20. We will always be in top 10 powerful stocks of that particular universe…what worst will happen then?
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