What do I do? Full-time independent stock market analyst and researcher:
Check the comparative stock list table on my Stock market research platform under curriculum preview!
I am also a book author:
Modern Value Investing book:
More about me and some written reports at the Sven Carlin blog: https://svencarlin.com
Stock market for modern value investors Facebook Group:
The eternal question is how many stocks should one have in his portfolio. The answer is pretty easy, the more you know the lower should be the number of stocks in your portfolio while if you know little or nothing you should go for more diversification. I discuss some research that show how adding more stocks increases your number of losing stocks and discuss how the modern portfolio theory approaches the issue. Buffett would say that diversification is protection from ignorance.
You are a real treasure !
I recognize your depth of understanding ( PhD and street smarts) and
Your enthusiasm .
amongst all the noise on utube you are simply -Gold!
Thank you so much
Phillip Silverstein M.D.
I only own fidelity cdn growth and insight class funds. I'm less confident in these after following you and reading the intelligent investor. I like the idea of managing 5-10 stocks but I feel I have much more to read and learn.
If you had to come up with a series of ideas about anything, how good would your 8th? 9th? 10th idea be really? I would go with your best several.. max 10. I think its impossible to have 37 good ideas.
As you already know I have been looking a lot into dividendstocks. My total amount of stocks is going to be somewhere around 14 in april. I have been looking into the French company of Engie as I am diversifying away from the USD as well.
After that I am going to see what is going on in Scandinavia. And if the world didn't collapse then I'll look at some banks as a even more diversification.
After all this my focus will be even more on my dividend companies and adding to position I already own.
Invest with Sven Carlin, Ph.D.
Don't need to comment on this but these are my dividendshare I own right now
All of these companies have been researched. Some after you made a video on them.
So from my standpoint I am not unhappy with any of these. PNL might be a dividendtrap but it's a small position and I bought it on the cheap so the yield is nice.
I have some other growthstocks but I am not mentioning them.
My next research is about the French Engie company. After that I was looking into fooddividend stocks. You made some of those but the seafood ones I am not touching. I already know that Salmon is now the number one export in Norway, but also that the downsides have already started to surface. I will research more after Engie.
After energy and food it will be consumerproducts, then banks and so on and so forth. Also I keeping an eye on GE if this turns green at some point
Invest with Sven Carlin, Ph.D.
Did you do a video about it? I am kind of looking into what are good ones to hold. I remembered Xinyang and Jupai in China. Copel in Brasil, and some others from your videos. Xinyang dropped a lot. So the yield gets bigger and bigger.
But in the other hand I want to diversify away from just one stockmarket. And dividends are for me a way to gain some momentum in increasing my monthly income to reinvest in the stockmarket.
It just seems that every way you turn in this market there is nothing that works well.
If I include the mutual fund, IRA, and 401K my portfolio is about 80% stocks. However I do have just one individual stock thus far (Tesla).
I'd be very interested to know your recommendation what percentage of ones portfolio should NOT include stocks?..
I'm 47 and no immediate plans to retire. In todays market stocks very little as you say. Question. Anything wrong with the plan of during an imminent market downturn I max out my 401K buying low and sell high in retirement a sound idea? Great channel by the way.
That depends on lots of factors, from your age, net wealth, etc. as investing is strictly personal. It also depends on the valuations of stocks, sometimes I have 100% of my value in stocks, sometimes much less, in this market it is around very little (big gains made on real estate in the last two years, but unrealized)
This is interesting Sven. If a person could buy all five hundred underlying stocks, individually, on an equal-weight basis and holding them with no subsequent changes.
including watching several individual positions go bankrupt, your private index fund would have crushed the public index fund over 30, 40, 50+ year periods. https://www.thebalance.com/investing-in-index-funds-for-beginners-356318.
" low-activity, long-term behavior, rock-bottom costs, and focus on a mix of businesses that happen to be far more profitable than average."
I created two portfolios to satisfy both my investment urges. One very concentrated portfolio of 5 stocks to practice my stock picking and chart reading skills and another 22 stock growth-income portfolio invested in strong cash cow companies with competitive advantages. The income portfolio is yielding around 3.3%, however, its total return has underperformed the market.
Hi Sven - Another good video, thank you! I break up my stock investments via the following. I break my holdings up between a few ETFs (Dividend Growth, International Developed Markets (meaning non-U.S. for me), Emerging Markets) for a total ETF allocation of about 25% and then individual stocks which I target 6%, 4% and 2% for each individual holding depending on my confidence in position. I keep it simple, highest conviction (6%), higher conviction (4%) and high conviction (2%). No need in investing in anything lower than that. :)
I look for long term trends and focus on leaders and an 'up and comer' or two in those industries, usually buying a bucket of those companies to increase my chances of hitting on the winner(s) (ex: V, MA, AXP, SQ in digital payments). I also dedicate a portion of my portfolio to companies that are leaders in their industry that I feel have depressed stock prices, but a fixable business (recent examples: GILD, DIS, SRCL, RHHBY and a couple U.S. retailers). I then allocate a portion to highly speculative companies, which I'm going for the home run on. Good areas for me have been healthcare/biotech and tech/software. And finally, I like to own leaders in growing industries, stay patient and hold until they start to lose their leadership positions (ex: SBUX, AAPL, CRM).
All in all, I typically hold 25-30 individual stocks which in all honesty is more than I prefer, but as my portfolio has grown I've been hesitant to allocate larger percentages to any single stock. My ideology is changing and my goal is to reduce to 15-20 initially and hopefully 10-15 over time.
Sven - I agree with your premise that the more holdings you have increases your chance of holding losers, since 63% of stocks underperform. So with that said, I'm in the midst of selling off some positions where my opinion has changed, which just happens to coincide with my belief the U.S. markets are due for a 10%-20% drop in the coming 6-12 months. Just my $0.02 and it's impossible to consistently time markets, although you can get lucky from time to time.
I just started my portfolio in august and got lots to learn. Your talks along with The Intelligent Investor are helping alot. I currently have 6 stocks (GM)(SNAP)(WATT)(GPRO)(ATVI)(F).I was planing to add around 3 more so this helps see why. Im watching (NSU) but not sure the best time to get in is.Im thinking about a copper/electric car play for awhile.Im new at this so Thanks again.
Thomas - Sorry to interject here, but I see you're in the early stages of building your portfolio. You've started off with a very aggressive if not speculative portfolio, with the exception of possibly GM and F which have their own issues.
My advice is 3-fold... 1) Understand the types of stocks you have, so you know the risks going in and don't overreact to stock price swings. 2) Learn to read and analyze a balance sheet and understand profitability metrics for companies (ROE, ROA and ROIC). 3) Don't ignore slower consistent growers that pay dividends in favor of only high-flyers. The power of dividend compounding is beautiful thing, especially if you're young and have a lot of years to let compounding work it's magic.
In closing, take the time to learn as Sven suggested and if you fail early, don't let that permanently dissuade you from investing. Best of luck!
Just take the time to learn, people go to school for 20 years to get a job they don't like while they usually don't want to take a few years to learn how to properly invest. The funny thing is that over a life time you make more money investing than working.
the money invested it s proportional to the reward/risk of a stock.. so the top has more money than the 2nd, the 2nd more than the 3rd and so on... the bottom in the list i invested are small "bet" small cap stocks, more risky.. so im exposed less..
Invest with Sven Carlin, Ph.D. it's a bit of a shame, i don't own any of our stocks. There are a lot of industrial and financial companies. But my favorite is Mayr-Melnhof, a company which produces packaging out of carton.
Thank you, great to have viewers from Austria, it used to be my favorite country when I was a kid, even collected Austrian stamps. As for investing the PE ratio is low for the country, I have to take a look at the stock exchange there.
Buffett and options? I don't think he uses normal option, he makes deal when he helps companies that look like options but have no expiration date, think Bank of America or Goldman in 2009. Do you have an example where he used options?
Interesting video. Personally I only hold two stocks at the moment. I'm still studying the next picks. If I remeber correctly, Joel Greenblatt wrote in "You Can Be A Stock Market Genious" that the optimal number of stocks was 7... But I can be mistaken. If that's the case, sorry Joel Greenblatt.
This trend strategy:
- That's exactly what this trend investor I once mentioned is saying. Only 1/3 of stocks can outperform the market. At least focus on them and not on short term noise.
- Companies (like Nestle, Reckitt Benckiser, McDonalds, Henkel, Visa, etc.) have to go through a selectioin process (business model, managment, staff, balance sheet, can products of the company fulfill basic needs insteed of short term trends, competetive situatioin and many more issues) before they are considered to become a trend, and they need to be sucessfully established on the market for several years - old trends (like 3M or Johnson and Johnson) and new trends (like Netease)
- And becuase those trend companies don't go up 100% or more in a year, one may take advantage of a stable trend by buying options (18 months time limit), Visa makes 15% a year (because the business is still expanding and it's highly probable it will continue to expand in the next several years) and the option makes 60%. You do this constantly over several years and that's where the outperformance comes from.
- Trends don't break over night, it takes at least one or two years (new competitor or something), so one can follow them over years. And most of those companies are market leaders which usually will defend their position.
- But to minimize the risk in this strategy you have to have at least 10 different companies in your portfolio. You buy 10 stocks (with equal amount of money in each) and 10 options (also equal amount of money) - if you have 20.000 € to invest each position is 1.000 €. In the end you have maybe two options blown up over 12 months. 5 options making 0-50% and three options making 100% and more. And this is how he reached 40 - 50% YOY performance over the last 12 years (but with a certain volatility).
- In addition this trend strategy offers you special opportunities like corrections. Nearly all trend companies show the same pattern after a stock price correction (current examples are Novo Nordisk, HugoBoss, Gilead Sciences, Celgene). If you buy in a correction your performance may be several hundred percents in a just a couple of months.
- Conclusion: As I decided to make this strategy to my basic strategy, I need at least 10 companies.
- He is offering this trend strategy to common people who want to invest just 30 - 60 min of weekly time in stock market. So there is no special timing (he simply sits out most corrections and volatility in a stock), no short term actions, no concentration on a potential outperformer. Basically just buy and wait 12 - 18 months and then sell. That's it.
- What I want to do is to identify outperformers among those trend companies, use better timing (due to market sentiment), trying to understand the company and it's business (to feel more I know what I'm doing) and especially idendifying special opportunies. For example I bought this Gilead option at the beginning of this year (because I was hasty, nervous and thinking I'm going to miss this opportunity), without checking the company. If I would have checked it I could have used much better timing and could have made 400% in 4 months in best case scenario (meanwhile I had to sit out -70%, now I have +50%). Here is the product ISIN: DE000CX3MNN3. I bought in January just after he recommended it at 0,74 €. I need to add that I've actually checked on 17th July 2017 if I buy more options (I wrote down pro and contra arguments). In the end I've decided against buying more due to take not too much risk, I didn't want to increase my Gilead position much more. Finally I've missed +160% but I feel okay with it, because I know also from other examples that I can increase some positions due to market sentiment
- I agree, too many companies in a portfolio is bad. Simply because there is limited time and I can't check 30 companies and monitoring them constantly all at the same time.
- I like to reduce from current 19 to 12 - 15 companies in my portfolio.
- Those companies have to be the best (in the best sectors and the best regions).
- And I like to apply all knowledge I gain here on this channel, other sources and experience, like deeply looking in a balance sheet, applying a margin of safety, training the mind, etc.
- and I bought some shares of Jupai and Amira => I'm really excited what will happen with them in the next couple of months - Jupai, I'm interested if and how much they'll increase dividend
- and I will look at PNE Wind (PNE3) because of those activistic investors
- and at the end of 2017 I want to look for a hedge for my portfolio, preparing a bit for bad times
Okay, I've layed out my entire strategy at once. Did you recommend to put yourself in the position of actuallly the owner of the company? Like to be a member of managment? That's really a very interesting thought (I actually did this a little with Gilead in July thinking okay what is the management going to do most likely with all it's cash and declining revenues and the things they've said at the beginning of the year). I need to watch your video again.
I even talk to others like I own a mine in Eritrea and Serbia or a basmati trading company in India, that is how deep I look at it from a business owner perspective :-). Thanks for sharing your strategy, I think it will help many out here.
Hi Sven! I've been following your "lectures" for the past weeks ;-). I have 4 stocks. I'm trying to diversify a little more, as one of the stocks (Vale) depends on the price of a single commodity (iron ore), and the futures market of that commodity is just very volatile. A change of 10-20% in the commodity price gets me rather nervous, however, similar changes in the stock price, not so badly.
that is what diversification is for, to allow you the same return but with less volatility so you don't get nervous. However, if you can take it and re-balance accordingly you can get to even higher returns.
I have 2 different accounts. A retirement account with mostly Berkshire Hathaway with a little AAPL, GOOGL, and AMZN added in there.
In my main account which I trade more actively I have 5 stocks. This is probably one of your best videos yet!
I'm pretty interested simply for research what those 6.1% companies that outdid the market were. Also Seven, why did you show the specific years of '83 till '06 and not something a bit more updated? Did the statistics show anything different for the past 10 years from what the Russel Index chart shows?
Thanks as usual my friend, your daily contribution is my university course.
In a time of increasing change and uncertainty, we must be clear on what will not change to not get distracted.
Strategic Portfolio Management.
1. Periodic evaluation and prioritization of the entire innovation portfolio.
2. Strategic and priority-based resource allocation.
On a strategic level, portfolio and resource management must be fully aligned.
3. Release and exit of innovation initiatives.
About the authors.
Dr. Ralph-Christian Ohr has been working in several innovation, division and product management functions for international, technology-based companies. His interest is aimed at organizational and personal capabilities for high innovation performance. He authors the Integrative Innovation Blog.
The Biggest Mistakes in Managing a Portfolio.
The Biggest Mistakes in Financial Planning Series.
by Harvey Jacobson, CHFC, MBA, CLU.
Investors who have remained consistent with their risk profiles through volatile markets have seen a substantial recovery in their portfolios since March 2009. Those who are truly behind are those who panicked and are now left with the decision of how to recover their losses. They can, but it is a much slower recovery.
This article published originally April 13, 2010, Los Angeles Daily News.
Managing an agile portfolio.
When the right people on the right teams have the right context, they naturally do the right thing.
Set the right context.