Len, I think that in the real world, 10 stocks is too many stocks to own in a $10,000 portfolio, even if risk of ruin theory says its better.Two reasons, first is that the cost of commissions starts to become significant and lowers returns.
The second reason is that losing $10,000 in the market will not kill anybody. If it did they should not have it invested there in the first place. If one has a market disaster or bad luck that wipes out his $10,000 porfolio, he can always go out and build up a new one from his employment income. For some people that will take awhile, for others not long at all. On the other hand, losing a $100,000 is going to be much tougher to replenish, so a basket of 10 stocks to reduce risk seems appropriate there.
I also believe that having too many stocks is not good either. I had 30-40 stocks but didn't have the time to follow them all properly and have taken some hits as a consequence. Also one needs to always be looking for new positions so I think 15 stocks is about right for even most larger portfolios. Obviously, many of them cannot be the sparsely traded, illiquid microcaps that this board often follows though.
