The first thing to say is that publishing a list of one’s holdings, mistakes and all, is a really gutsy thing to do. So, kudos to him for that. The second point to be made is that each investor is his or her own person with their own means, needs, skills, goals, opportunities, and obligations and what they are doing isn’t likely to be what you would do or how you would do it.
Those things said, I think the portfolio lacks discipline. It’s a machine gunner’s “spray and pray” portfolio, rather than a sniper’s "one shot, one kill’ portfolio. Years ago, when I was trading bonds, I typically carried 250 to 300 positions, because that was the best way to manage my risks. With stocks, however, and the ability to trail stops and to hedge with the use inverse ETFs, much more than 30 to 40 positions is too many to track and manage. (IMHO, natch.)
So, which of Paul’s 188 positions should have been cut? The biggest losers, obviously, and before they became big losers. But there’s something even more important that’s missing, namely, “How many of those positions really are just the same bet?”
In other words, is a stock position not working due to specific company fundamentals, or is it due to factors that are trashing the whole industry/sector? If so, why not be short that industry or sector instead of long a specific company within that industry/sector? OTOH, if the industry/sector is doing well, as the gold and silver miners have been for months now, why own shares of companies within that industry/sector instead of just buying an index fund that tracks the industry/sector such as GDX, GDXJ, SIL, SilJ?
For sure, there are times when some of the components within an index fund do better than what the fund achieves as a whole, just as there are times when some individual holdings “under-perform” the average. But if the fund --be it open-end, closed-end, or exchange-traded-- really is a proper index fund and not just an outrageously over-weighted bet on just three or four stocks that make up nearly half of the holdings, then there’s not much to be gained from betting on specific components than the whole group of them
Here’s a specific example. I own PAAS, a silver miner, and Schwab reports that my gain on the position is 322%. PAAS is a component of SIL, an ETF that tracks the silver miner majors. If a chart is created for PAAS using a comparative indicator with SIL as its underlying, it’s possible to see --as I said-- that PAAS sometimes out-performs its benchmark and sometimes under-performs it.
So here’s the real question to be asked. "Do you want to ‘trade’, or do you want to ‘invest’? If the latter, then it’s the tides of the macro situation that should concern you, not the ripples and waves, and making bets on whole industries and sectors, rather than messing with individual stocks, is the far easier --and equally profitable-- approach. (IMHO, 'natch)
Thus, my bet would be that Paul’s 188 positions could be reduced to 20 to 30 and such a portfolio would achieve overall results comparable to his present one.
And, yes, I own both PAAS and SIL. But I wouldn’t have gone that route had I read this post. I’d have just used SIL to make my bet.