Gain Needed To Recover From Earlier LossMike
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Something I’ve changed a lot over the years is how I manage my portfolio. This topic can be controversial, but I don’t see why it is. Keep it in context, apply what makes sense to you and that’s all there is to it. No need to read between the lines or over think things.
So how has my approach changed?
I’m more active in managing the transactions and position sizes of my positions.
- I don’t mind a big winner taking up a large percentage of my portfolio, but will take profits if anything shoots up and buy it again when prices fall. Because as momentum and traders rush in, they will jack up the price and bring it right down.
- I’ve come to accept that my best idea could be my 5th or 10th best. In this case, I’ll either get out or cut losses and move the money to what turned out to be better ideas.
- Buying and selling isn’t all there is to outperformance. Utilization of bankroll is just as important (investing in non-taxable accounts make it much easier to deal with).
What We’re Reading in the Media
Buffett and Jamie Dimon have called for companies to stop providing quarterly earnings guidance. Short sighted thinking by management to meet or massage numbers in such a way isn’t helping the economy. It’s taking from its future. Giving guidance “delivers the wrong message”.
“McKinsey found, the practice of giving quarterly guidance took up valuable time from management and made them focus too much on the short term.”
The biggest winners of any IPO, corporate change or bankruptcy are the lawyers and advisers.
This is an example of how LBO’s don’t work. It suffocates the company and prevents an old cash cow to tackle on new ideas and initiatives as new competition emerges. I remember back in my childhood days, roaming the aisles of ToyRUs, riding bikes, checking out what new toy was in. Sad to see it go, but a good case study to learn from.
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Article by Jae Jun, Old School Value