The Great Liquidity debate again. I hate going here, because I strongly disagree with you.
for example Wade I would feel any here would easily say your the most extreme with liquidity requirements. I think we can all agree on that.
I mean for you if a stock doesn't have 500k $$ volume you probably don't even look at it. Guess what that eliminates alot of stock we buy here. Now why is that? Your trying to put 200-300k into a position, nobody else here is probably doing that, I'm know I'm not, not even close. Not that I have ever tried it myself, or recommend doing so because right/wrong I believe I can beat the VMIR, by picking my favorites among that list. But if one employed this strategy of investing in the VMIR (and as I said I don't agree with doing that), but for the basis of this excercise to see if returns are realistic, if one had a 500k portfolio and did this each position would be a 5k position that would not be a problem to move in/out of with patience on most/if not close to all of the stocks in the VMIR. if one had a 1,000,000 portfolio and did this they would only be moving 10k in each position, most of these stocks wouldn't be greatly affected as long as one isn't dumb enough to use market orders to enter these positions. The point is these returns are mostly realistic, so I disagree with your assessment.
Now if you want to tell me a stock that does 50k dollar volume you can't dump 200-300k in one shot sure, but you realize your asking is the process getting accurate returns, what person would be moving 200-300k in 100 of these stocks, that would be a portfolio of 20-30 million if someone did that. So is the numbers realistic, yes, because your in/out rule doesn't apply because if somebody spread their portfolio over 100 stocks, chances are they wouldn't be moving much more then 5-10k (if that) a stock, and most stocks you wouldn't have any problem moving that in my opinion. Now if you want to tell me, the number doesn't account for taxes, or possible trade costs (which won't have a huge affect) that I agree with. But I'm not buying for a second your liquidity arguement, because if somebody employed this strategy how much would you have in one stock, and would it really affect the stock getting in remember 5-10k would be a far cry from the 200k-300k you invest in a position in my opinion. So I don't see liquity as a major concern, because when you split your money up in 100 stocks, the position wouldn't be huge enough in most cases to affect prices dramatically (another reason why you diversify more, and don't increase your $$ volume requirement to the moon, but a debate for another day). Now as I said earlier, I don't agree with anyone doing this strategy, because I believe with good DD, you can do better then the VMIR, plus 100 stocks is too much diversification for my liking, and I love diversification. All is just my opinion, and I could always be wrong though.
