At my first job, we ran some money in a separate account for an individual who had some very different investing philosophies than how we ran the mutual fund and hedge fund.
We ran a pretty concentrated book at those strategies. Maxing out around 30 names in a universe of 250+. We were definitely not huggers of our benchmark.
But this individual capped the number of holdings at 10 - but preferred to hold 6-8 names.
We didn't care about benchmark weights or company size. We had an equal-weighting between the holdings.
And the craziest thing happened: this "best ideas" portfolio outperformed our more marketable strategies!
It goes to show that "diversification" is only important if you haven't done the work to be confident in your picks. But if you've done the work and have confidence, push those bets!
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