I am learning too, so I think I can give my views too.
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Read somewhere that investing is long term trading and trading is short term investing. I like to consider myself as a speculator, as I am not looking at the value of what I am buying, and I am essentially following just the price.
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One of the ways to mitigate risk to stretch the number of stocks, diversification. It will reduce the returns, if it does not happen and the capital is distributed to other stocks which rise. But for any foreseen happenings, the absence of diversification can bring more losses. Also, in the initial days of implementing a strategy, it is better to diversify. And, there is also a chance of getting some return from the stocks which we do not want to buy but buying for diversification. Sometimes our conviction can go wrong and the least expected stock to go up can go very high, defying our understanding and interpretation.
As the learning, shape, tinkering all become into a system which has seen thick and thin, along with our active monitoring, we can think of reducing the number of what we buy and increase the position size, take concentrated bets.
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