I am still dealing with price anchoring issues…I own BOFI and SKWS, and want to increase my positions, but can’t pull the trigger…I know I should focus on the current future of the companies, rather than looking at the past performance of the stock price
Hi Darrell, Treat the companies as if you had just encountered them, and then decide, based on their current earnings growth, PE ratio, prospects, price, etc, would you buy them now. what they did in the past is irrelevant. Price anchoring is a BIG mistake.
I guess my question to you is that you were starting a portfolio today, would you allocate the same amount to your top conviction stocks or would you initiate a smaller position and let it grow?
I never start with an oversized position. I start with a medium or average size position and let them grow. Sometimes, I start with a small position and add to it while it’s growing.
I keep having regrets that I missed out on the huge gains on many stocks, which I know is foolish to do…
You are right. The market doesn’t have an upper limit to which it grows and then stops. There are always new young companies that come along and grow quickly.
Another thing I noticed, is that you don’t have any large cap stocks…My portfolio is full of large cap stocks such as AAPL, AMZN, MA, SBUX…I wonder if I should reduce my positions and focus on more mid/small cap stocks…Saul, if you were 36 years old today, would you invest differently than you do now?
If I was 36, I wouldn’t invest differently than I do now, I’d invest differently than YOU do now. You are investing like an old man with very large caps. If I was you I’d invest in more mid to small caps.
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