I find a company I believe in, learn everything I can about it, and then put all my money in it and follow it obsessively.
Starting at the end of last year, it has been TSLA, although I’ve kept a little AAPL around for old time’s sake.
Then I play with a few other things on the side…
There’s a difference between running a concentrated portfolio, which is something some of us do, and running a singular portfolio, which is something none of us do.
Near as I can tell you put maybe 10% of your portfolio in a company you feel strongly about, so even if it doubles you’ve made only 10% profit. Is that right? If your portfolio starts at $1M, a truly awesome call nets you $100K in a year.
I bolded a phrase you used there. Doubles aren’t rare. Many of us have multiple doubles. And, many of those doubles are actually triples, quadruples, or more. But, getting the timing exactly right on these is rare. I don’t set short time limits (and for me a 1 year limit is short) on my investments. Whether you want to talk about the market being irrational or just that it can take time for a successful company to build on its own success or just that it can take the market a while to recognize the future success, I’m content to pick companies that I believe will do well - but without setting a time limit.
I bought ANET in 2014 at $66, then added in 2016 at $63, and again in 2017 at $88. I also sold Puts a few times. ANET is more than a double for me now. No-one could predict the Cisco lawsuits when I first bought. But, after the lawsuits, one could predict that ANET would probably win in the end. So, I bought more. I’m up about 150% today, so more than a double, but also longer than 1 year from my first purchase.
I’m comfortable running a concentrated portfolio, but wouldn’t be comfortable running a singular portfolio. And running a diverse portfolio is also not for me, although Anurag did that quite successfully (he subscribed to a number of TMF services and literally bought every rec when recced). Lately he’s been selling, reducing leverage and raising cash. I don’t know that he’ll end up with a concentrated portfolio, though.
I have had a number of doubles and more than doubles. But, I’m not nearly good enough that I could have known which of my doubles was going to happen when. Many of my picks didn’t double, some even went down. For me, what works is adding to winners and cutting losers - and that’s not always determined purely by stock price. I bought TSLA in 2011 and it’s obviously been a great run and I’ve added and played options for profit and today still have what everyone here (except you, obviously) would consider too much in Tesla. Going all in on TSLA in 2011 was not something I could stomach back then.
I also bought NVDA, but back in 2009. It was not my #1 pick at the time, and obviously today it’s done better than anything else I bought that year. Could you really imagine going all in on NVDA in 2009, riding the stock up to a double or more, then having it crash lower, then it crawling up, and then finally exploding? No way. Even in 2015, how many of us bought tons of NVDA knowing what was to come in 2016? None of us. Oh sure, some people bought in 2015 thinking that Nvidia would do great and eventually AI and automotive would take off for them. But, who could have predicted that Mr. Market would recognize that in 2016 and not 2017 or 2018?
I can’t pick winners with 100% accuracy, which is what a singular portfolio requires. I surely can’t pick winners within a limited time frame, which is what I think you’re characterizing as an “awesome call.” I can, however, pick a small number of companies and have enough of those companies do well enough in a reasonable amount of time that my portfolio does very well overall.
In other words, I don’t have to hit a Grand Slam in a one inning game to win. I can hit a several singles, tolerate a couple outs, hit a double or triple or even a home run sometimes, steal a base (with options), and win the 9 inning game instead.