Swinging For the Fences with Concentrated Portfolios
May 11th, 2008 by Buck Woodford
It sometimes pays well, but is a tough line of work.
One of my core tenets is to never, absoulutely never, let one individual trade or transaction impair our capital to a degree we can’t recover from quickly. Opportunity comes around far too often to cling to losing positions very long.
While preferable with a beautiful and personable girlfriend, there’s absolutely no need load up and marry any of your stock ideas.
Several smart and wealthy guys have found that out the hard way recently.
Ironically, just a few days after this post we have amassed our largest individual stock position in recent memory. 8% of the portfolio is in Cal-Maine Foods (CALM), whose float is nearly all sold short. No guarantees, but this could be the squeeze of the year.