Someone quoted to Uncle8888 last night that she saw one blogger was doing well by taking concentration risks. She is thinking of taking that approach to average down on one stock - potentially good prospect.
What your favorite bloggers may not have say it loudly?
The highest weight-age in their current portfolio stock may look like having concentration risk at recent snap shot view.
Do you think that Uncle8888's Kep Corp is about 18% of his current total stock investment cost is a concentration risk?
So what is risk?
Read? Getting good returns without too much risk???
Risk is about permanent loss of our capital . Right?
In this case, the whole current Kep Corp position holding is FOC!
Not a single cent of his investing capital in it.
Now, where is the risk by the definition of the current World's Greatest Investor of our times?
He don't have risk; but he will have his greatest REGRET of not making more hays while Sun shines. Sianz!
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Hi bro8888,
ReplyDeleteI think some people have to learn the lessons about averaging down themselves. I'll never do that again, not without looking at my total allocation for my portfolio for that particular stock!
Unfortunately human beings don't think in absolute dollars. We think in relative dollars and behave as if not all dollars are created equal. By assigning relative values to different moneys we run the risk of being too quick to spend, too slow to save, or too conservative when we invest—all of which can cost us in the short or long run.
ReplyDeleteBut then all money is really the same!
Agreed! We invest to increase our wealth.
ReplyDeleteHence the capital gain is our wealth, not FOC money.