TED & how it influenced my investing Strategy. |
Time for my confessions. My situation is not very different from those weight loss/ hair loss BEFORE and AFTER ads in newspapers.
BEFORE:
- I was fat (30 stocks) and had lot of flab in the middle. My original thought process was that since Index has 30 something stocks, I should have a similar number in my portfolio - across almost all the sectors.
- I was almost bald and had very little hair (conviction in a stock) on my head. Like the suit boot waley who manage mutual funds, I would rarely keep more than 5 - 6% of my wealth in a single stock.
- Girls never used to like me much and used to ignore me all the time. My portfolio would always trail or just about equal the index returns.
AFTER:
After some TED treatment, I am a changed man.
- The flab in the middle is gone, and in its place, I have a six pack abs. Six stocks that constitute almost 75% of my portfolio.
- I have lot more conviction in the stocks I own. At one point of time, I had 25% of my money in one stock.
- I am now nimble enough to move my money from one sector to another sector.
- Right now, I'm not only thrashing the index, but am also getting close to beating most of the suit boot waley (MFs)