Joining the choir, sort of

I found this board over three years ago, how time flies! It was a time when I was perfecting my own growth stock strategy which is quite different from Saul’s. I was picking good stocks but the portfolio as not acting right. What I’ve learned from Saul is to improve the portfolio management.

“Be more forward looking instead of price anchored” is probably the most important lesson in that it leads to more aggressive portfolio management. One needs to be quicker in recognizing mistakes that drag down performance.

Buffett has said that if he had a smaller portfolio he could get better yields. Large portfolios are stuck with buy and hold because switching large positions moves markets. We fortunately (or unfortunately) don’t have that problem. Also large portfolios need (or tend) to avoid low market CAP stocks and low liquidity stock which Saul has already mentioned. The one thing that keeps us from acting swiftly is often price anchoring or perceived loss avoidance – the loss is there, we have just not accepted it – in accounting terms, unrealized vs. realized loss.

Denny Schlesinger

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I’m not sure if I overcame price anchoring in the right way. I’d look at a stock that wasn;t doing well, but see that overall I was doing very well. That made it easier,maybe too easy, to jettison the poorer stock.

I would think the best way is to decide what to do about a particular stock is on its own merits, without regard to other stocks you happen to be holding.

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