I always add or remove to positions over time. No hard and fast rule. Example: if i have a quality company and market sentiment pushes the price down i will add to it. If I've decided to exit i will do it over a month, a little at a time.
My portfolio is obviously much smaller!
Also, i have recently started to buy a small position for watchlist companies at current prices. Say 1-10 shares. If it is in my portfolio i find psychologically I follow it closer than if on a watchlist.
Some things to consider though: If Buffett run a lot less money, would be go into positions as slowly? Early on, he put very large amounts in Coke and AmEx straight away, not over years, because he ran less money. So I would say that going into recent positions over time is more a function of the amount of money he manages. With Apple especially, the initial position was Ted & Todd, not Buffett. After a while, THEN Buffett took over and added to Apple probably as fast as he could.
The final bit about starting a portfolio with 40-50 smaller positions also isn't true, Buffett never did this as an approach. He always had 4-6 Core large positions and lots of small "turn arounds" as he called them.
Selling out over time makes sense, but also is partly due to the size of his portfolio now vs the daily volumes of the holdings he has. He can't just dump it all quickly. Early on, he often sold larger positions quickly as possible if a better opportunity was available.
Great insight. I suspect (without any evidence) that the analysis would be done in full before any purchase and the reason for buying in over time could be the size of the huge positions relative to market liquidity. Need to see the position size v market depth to have any conviction about that though. Have been 75% physical gold all year.. that has worked very well … his comment about 20 investments in a lifetime is useful and aligns somewhat …
This is just the Pareto Principle though. 20% of some group does 80% of the work. Many investment companies have a few stocks that make up the majority of their net worth.
Also consistently investing over time is just dollar cost averaging. Not very new stuff! It's just Investing 101.
I always add or remove to positions over time. No hard and fast rule. Example: if i have a quality company and market sentiment pushes the price down i will add to it. If I've decided to exit i will do it over a month, a little at a time.
My portfolio is obviously much smaller!
Also, i have recently started to buy a small position for watchlist companies at current prices. Say 1-10 shares. If it is in my portfolio i find psychologically I follow it closer than if on a watchlist.
Really like that approach, especially the idea of tracking watchlist names with a small position.
No one talks about position sizing because it's such a difficult concept
Totally agree! It’s one of the most under-discussed parts of investing, yet makes a massive difference to long-term results.
great!
Cheers!
Bravo Schwar! 🙏
Glad you enjoyed!
Great analysis. Really interesting breakdown. Thanks guys.
Thanks Joel, appreciate it
Some good analysis.
Some things to consider though: If Buffett run a lot less money, would be go into positions as slowly? Early on, he put very large amounts in Coke and AmEx straight away, not over years, because he ran less money. So I would say that going into recent positions over time is more a function of the amount of money he manages. With Apple especially, the initial position was Ted & Todd, not Buffett. After a while, THEN Buffett took over and added to Apple probably as fast as he could.
The final bit about starting a portfolio with 40-50 smaller positions also isn't true, Buffett never did this as an approach. He always had 4-6 Core large positions and lots of small "turn arounds" as he called them.
Selling out over time makes sense, but also is partly due to the size of his portfolio now vs the daily volumes of the holdings he has. He can't just dump it all quickly. Early on, he often sold larger positions quickly as possible if a better opportunity was available.
Great insight. I suspect (without any evidence) that the analysis would be done in full before any purchase and the reason for buying in over time could be the size of the huge positions relative to market liquidity. Need to see the position size v market depth to have any conviction about that though. Have been 75% physical gold all year.. that has worked very well … his comment about 20 investments in a lifetime is useful and aligns somewhat …
This is just the Pareto Principle though. 20% of some group does 80% of the work. Many investment companies have a few stocks that make up the majority of their net worth.
Also consistently investing over time is just dollar cost averaging. Not very new stuff! It's just Investing 101.
WB as a value investor is midtable. Trend followers are found at the top. Worth putting their performance into perspective.