8 replies to this topic

[OEXCHAOS]

I will probably regret this, as it looks like a squeeze extraordinaire, but I'm letting go of my AMZN here at 54 and change. I bought it at 36ish. It's just a big gain and I doubt that AMZN is going to cure cancer any time soon. It's a retailer. A good retailer, but still, just a retailer. Now I have to find something that I can replace it with. Mark

[golden]

I'm letting go of my AMZN here at 54 and change. I bought it at 36ish.

Nice trade!

[hiker]

beautiful!

[S.I.M.O.N.]

I will probably regret this, as it looks like a squeeze extraordinaire, but I'm letting go of my AMZN here at 54 and change. I bought it at 36ish.

It's just a big gain and I doubt that AMZN is going to cure cancer any time soon. It's a retailer. A good retailer, but still, just a retailer.

Now I have to find something that I can replace it with.

Mark

yikes, 50% gain , i think your done for the year.

[OEXCHAOS]

I didn't own enough. And I wasn't really going for an atta here. I just mentioned my long when I put it on so I figured I mention my exit, too. I also didn't expect this move this quickly. I figured this one would move like the market. What this IS, however, is a perfect example of why you want to have ample diversification in your portfolio, especially if it's value oriented. You never know when the market is going to suddenly recognize that what you have is great. Mark

[SandStorm]

I didn't own enough. And I wasn't really going for an atta here. I just mentioned my long when I put it on so I figured I mention my exit, too.

I also didn't expect this move this quickly. I figured this one would move like the market.

What this IS, however, is a perfect example of why you want to have ample diversification in your portfolio, especially if it's value oriented. You never know when the market is going to suddenly recognize that what you have is great.

Mark

Hi Mark. Is there such thing as too much diversification? Would you consider 50 stocks in a million dollar portfolio too much diversification? Thanks.

Someone famous once said a portfilio should be like a garden -- something should always be in bloom.

[Cirrus]

Great job Mark....glad I'm not short!

[OEXCHAOS]

I didn't own enough. And I wasn't really going for an atta here. I just mentioned my long when I put it on so I figured I mention my exit, too.

I also didn't expect this move this quickly. I figured this one would move like the market.

What this IS, however, is a perfect example of why you want to have ample diversification in your portfolio, especially if it's value oriented. You never know when the market is going to suddenly recognize that what you have is great.

Mark

Hi Mark. Is there such thing as too much diversification? Would you consider 50 stocks in a million dollar portfolio too much diversification? Thanks.

The short answer is, it depends.

With a million, you can certainly afford 50 stocks. Still, I think that at that point you're sort of abdicating responsibility for performance (with some exceptions). I mean, you should end up having performance that looks a whole lot like the broad market, unless you're diversifying within sectors with fairly risky smaller issues. That's certainly OK, but I'd say that 13-20 core holdings that you really understand pretty well is adequate. That way, you can hopefully stay out of a few really sick sectors even as you have fairly broad diversification. If you want to add some smaller positions in more speculative issues or if you want to buy a basket of smaller stocks in a sector that you want to own, that's a fine addition too. Obviously, this would take you into well more than 20 issues, but the lion's share should be in a not too diversified, not to short list of issues.

The one's who kill me are the folks who pay a "consultant" to put them in a "diversified portfolio of mutual funds". In most cases they'd do better to just buy some SPYders and the IWM.

Mark

[SandStorm]

Thank you for the reply, Mark. I think I understand what you are saying. Like 13 - 20 industries should be the max, and spreading out further within the same industry shouldn't be considered as too much diversification, esp. if they are riskier issues. That makes sense to me. Thank you.