B&W,
I always let my portfolio lead me. I try to stay neutral and eliminate the bad guys and add to the good guys.
I tend to agree with you, but have questions about how you allow your portfolio to lead you. First, let me discuss my instance. I sold LGIH to purchase two other stocks, UBNT and TWLO. I listed those two names as high conviction for me. However, that wasn’t necessarily because my portfolio was leading me in that direction. For instance, I’ve made money in LGIH. However, am about even in TWLO and have been a buyer around $28. UBNT fits with the “let your portfolio do the talking” theme. I have held it for several years while it floundered. I’m a buyer again today especially after the drop last quarter which I believe is unwarranted. While TWLO has been relatively flat, I believe their future potential is large.
To summarize, my decisions are based on what I feel about each company, their valuation and their future prospects. My questions about your decisions are as follows. How do you evaluate closed end funds and MLPs and BDC type of companies? Your staggering statistics cannot be achieved by tax deferred distributions alone. They have to be spurred by price appreciation as well.
You’ve written a lot about how you let your portfolio steer your decisions. However, you’ve written little about how you make the initial decision to invest in a specific equity. That is what I’m interested in.
I should have taken this to another board or another thread maybe. Therefore, I’m sending this to you personally as well in case it is better replied to one on one.
Take care,
A.J.