An observation for investors
Yes, picking the best of the best companies without worrying if they are expensive, in a concentrated portfolio, is a strategy that works. Here we are nearly six months into the year, and the S&P is still in negative territory, the Dow is still in negative territory, the Russell 2000 is still in negative territory, the IJS is still in negative territory (and yes, the nasdaq finally is up year to date).
How does that compare with a concentrated portfolio of expensive companies? Well my portfolio finished up over 100% YTD today for the first time this year (100.5% to be exact). And look, any of you could have done the same or close. There were no secrets, the stocks were discussed at length on the board, all of them. You saw in my monthly summaries what I was investing in, and the relative sizes of my positions, and how many positions I had. You also even saw my mistakes, like exiting Coupa when I did, and exiting Afterpay. It just proves that you don’t have to be in all the winners, or worry about the ones that got away. Up 100% in a flat/down market is quite adequate. You just have to accept the realization that you just can’t do it, it’s just impossible to do it, if you spread your investment out to every good story, second level companies, third level companies, fourth level companies, and end up with 30, or 50, or 100, companies in your portfolio, and then being proud that you had one that went way up. That’s just not what it’s all about.
Best to you all,
PS, And yes, being up over 100% in this market is truly, truly, surreal! Bizarre even. But you know that it was done in the real world!