Replies to post #336 on Rithm Capital Corp (RITM)

[jugs]

I like that you're confident. I like that you're adding to your position.

What bothers me is that you're hoping to build a position capable of supporting you and yours fully or at least meaningfully. If you could just flip a switch and instantly have the desired number of shares needed to provide that level of support, then I'd be saying "Great!"

But you're building that position. I gather it will call for reallocating cash now residing in other picks. Letting go of those picks means letting go of your research, history and knowledge of those to be discarded.

NRZ is a fine company, beautifully managed and very well thought of by those who know far more than I do. But a problem remains, as I see it:

When we put a crown on a stock pick, we effectively annoint it king of the hill. Instead of spreading the risk around over ten or fifteen plays, we're now talking about focusing on five or ten with a major tennant in the role of King.

You could be seriously wounded, maybe even ruined if the unthinkable occurred with NRZ.

In truth, I've done exactly what you're contemplating. I'm holding 34,100 units of NGL. It got hammered all week but gained 90¢ today. If the company died today I'd not stop working the stock portfolio although my NGL position represents more than half of my investible stock cash.

The difference is that I don't use much portfolio earnings for my family needs.

Please give your plan more thought before execution. You may be unwittingly painting yourself into a corner.

I now hold 1,000 NRZ. I'm in thirteen picks, all of which are contributing. And my NGL position has me on the edge of my seat daily. I'm good with risk. You may be ok with risk too. But if major losses could cripple you, rethinking things would be very smart.

I sure hope I haven't offended you, by the way. Seeing my loss of $25,000 yesterday was one thing. Seeing a $33,000 gain today showed me how incredibly lucky I truly am.

And yes, I expect to continue accumulating NGL and NRZ. My household income is sufficient without dependence upon passive income.

Best of good fortune to you!