Contrarian Value Ideas

[gfp927z]

Derf, >> going to see mutual fund like returns <<

Yes, that's true. Having 200 stocks likely means returns will be similar to the S+P 500. But having so many stocks makes it almost impossible to sell everything at the first sign of trouble, which has always been my problem (nervous nellie). Bailing out after the profits start to build up is another problem that this approach solves. So to 'stay the course', I made it too cumbersome to sell.

So having 200 stocks is mainly a psychological tactic, but only for 1/2 of the stock allocation. The other 1/2 is in the S+P 500, which can be sold off easily if needed, or adjusted depending upon market conditions. So there is a nice balance, which so far has been working.

Another reason to have 200 stocks is the 'collecting' aspect. Some people have been bitten by the 'collecting bug' (coins, stamps, records, etc), so stocks are just one more category to collect. Another reason to have so many stocks is that there are so many great long term stocks out there. My main screening tool is the trajectory and steadiness of the 10-15 year chart, and there are dozens and dozens of stocks that qualify. Add in 10 or so turnarounds, and voila, you soon have 215 stocks. It's also a fun and interesting hobby if you are retired with too much free time. But whatever works. Every investor is different.



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