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Anonymous
I mostly hold to the relative safe choices π€πͺπΌ
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Sharon
03 Jan 2021
Life Alchemist at School of Hard Knocks
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Though this was not planned, I have the following allocation (invested amount%) based on the market cap which is probably one of the indicators of margin of safety.
greater than 500B mcap - AAPL, FB, MSFT (30%)
greater than 100B mcap - SQ, SHOP, ZM, SE, NFLX, ABNB (50%)
less than 60B mcap - WDAY, TWLO, OKTA, PLTR(20%)
So it seems only 30% of my portfolio is in a relative safe zone if you only look at the size of the company, but it works fine for me as it aligns to my risk profile.
βββ
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BF
21 Dec 2020
Blogger at Humji Investor (www.humjiinvestor.com)
Mostly big stocks. I think when picked well (reasonably valued, good dividends), there's not that mu...
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I'm investing to get outsized returns in 20-25 years, so it's more about the company quality, the growth trajectory, and where the company is in the S-Curve business life cycle.
S-Cure Business Life Cycle
Big and safer stocks like Facebook, Amazon, Apple & Microsoft are in the Maturity stage, and two ways companies in this stage could go from there 1) they continue to innovate and maintain growth steadily (e.g. Apple - IPO in 1980), or 2) they could go into decline (e.g. Intel - IPO in 1971) - due to factors like mediocre management, industry headwinds, etc.
Using the example of Amazon, their market cap is already 1.63T. Is there still room for growth in the company? Definitely. Can their market cap grow to another trillion dollars? Just questionable to me & the stock price can trade sideways for a while.
In this case, I noticed Amazon's stock price has been hovering between $3,000 & $3,300 for 4 months now. Meanwhile, companies with a smaller market cap (e.g. CRWD 46.87B but it doesn't mean it's riskier because it depends on the company quality both quantitative and qualitative aspects. CRWD is in the Expansion stage) have experienced exponential growth in their stock price.
Of course, if someone is retiring in less than 10 years' time, they may want to hold companies that are matured yet continue to grow through innovation, e.g. Microsoft, Apple. However for a younger person who is in their 20s, 30s & even 40s, one could look at holding more companies in their hyper-growth or growth stage (early Expansion).
I only have 6 stocks in my portfolio. My top two positions that made up 45% of my portfolio are in TSLA (23.8%) and CRWD (21.4%). I don't have any of the FAANG stocks. So far in 4 months, the strategy works well for me. I still sleep well at night.βββ