Hi Aim Hier,
No arguments here. I welcome all improvements. In fact, in the book's section on optional rules, I mention that, even though I stick to the basic rules, I would not be surprised if others developed an even better system.
In the past, I've also thought about increasing CV by a certain % every year. That is certainly a valid adjustment to make.
I want people to customize STR to suit their analysis and philosophy. So, if someone wants to implement the trading model that they increase their stock positions over time by growing CV, increasing it by a yearly "interest" is a good way to do it.
Just to clarify, even the basic STR rules want to grow the stock holdings over time. Its just that, instead of growing each position's CV, it wants to grow the number of positions by reinvesting cash in excess of 30% of the portfolio value.
In the book, while I didn't specifically write about increasing CV by a yearly %, I mention that you can grow it, and I have an optional rule for increasing CV when stocks go up by averaging the constant value and the higher stock value, to compute a new CV.
As far as how much to invest in one stock, the basic system is that you can always replace a position with another one if, for example, something changes fundamentally that you don't like about the company.
There is also an optional 50% (or N%) stop loss rule, where you exchange a stock if it drops below 50% (or N %) below your initial buy point.
One thing about STR is that rebalancing a position only once a year also helps keeps you from taking small profits and adding a lot to losing positions.
