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Defense against ignorance !!!

Today I lost 15% on JOSB . (in one day)

I don't understand how guys like Joel Greenblatt, Glenn Greenberg,Bruce Berkowitz ,Ian Cumming etc. can sleep when 90% of their portfolio consists of no more than 4 stocks.

Glenn Greenberg-CMCSK-1085 mil.dollars   (37% of total assets)
                         UNH-    705mil.dollars      (18.46% of total assets)
                         LH-      500mil.dollars      (17.43% of total assets)
                         AMT-    500mil.dollars      (17% of total assets)

Total  (90% of total assets=4stocks=2790mil.dollars)



Bruce Berkowitz-BRK-A,B      711mil.dollars    (27% of total assets)
                       CNQ-          470mil.dollars    (18% of total assets)
                       DISH-         364mil.dollars    (15% of total assets)
                       LUK-           198mil.dollars    (7.28% of total assets)

Total  (70% of total assets=4stocks=1743mil.dollars)



Joel Greenblatt - WMT-19.89mil.dollars      (54% of total assets)
                         LEA-11mil.dollars            (28.89% of total assets)
                         AXP-3.2mil.dollars           (8.5% of total assets)

Total  (91% of total assets=3stocks=34mil.dollars)
By GordonGekko at 2006-08-31 09:38 | Stocks | GordonGekko's blog


Re: Defense against ignorance

Considering Greenblatt's track record of success I would assume that he has more than 34mln at stake in the market.
By Pat at Thu, 2006-08-31 12:56 | login or register to post comments

RE: JOSB

I feel for you.  I have had that happen to me with a number of stocks now.  My only consolation is that guys like Greenblatt do extensive research - which requires full-time work and access to resources you and I don't have - before investing.  Examples of such research would be calling up every store of the company or talking to industry experts or possibly hiring consultants.

-theo
By Theo at Thu, 2006-08-31 18:02 | login or register to post comments

Re: JOSB

Those are unconventional investors, that kind of concentration is too much for me too.  I'm against extreme diversfication but ~15 stocks is a good number for me.  In concentrated portfolios, the key is to have your biggest investments in your 'strongest conviction' stocks, or stocks that have limited downside.  You can have some 'all or nothing speculations' but with a smaller % of the assets.  At least I structured my stokblogs portfolio this way.

Notice that JOSB has 44% of the float sold short, and several hedge funds among the largest investors, so you know that the stock will have wild swings one way or another...
By Bruno at Fri, 2006-09-01 08:06 | login or register to post comments