Glad the simple thoughts are appreciated.

Investment (for me) is all about learning to get to high conviction on ownership. However it’s not possible to get there in a hurry. As the saying goes “it takes a long time to make an old friend”.

The number here is not important. It could be one, five or ten.

20% is on “discovery/search” phase of finding those high conviction companies. (Some work out – some may not). Some become old friends some just acquaintances…

No percentage is allocated for trading. Have no negativity for traders. It’s just a different ball game. Different mind set, different rules to win, different temperament.

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One angle to discuss the concentrated portfolio is through the lens of “risk”.

In high conviction companies we eagerly want to take the “risk” through more ownership.

In speculation/discovery/search phase we want to limit or distribute the “risk”.

The best example of risk takers are entrepreneurs who put everything they have in their own company. Talk about concentrated “risk”.

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One of the lessons I learnt from the past was not about losing through having too concentrated a portfolio – it was rather not building/adding more on companies where your conviction grows. (as the company proves itself and becomes an old friend)

i.e.  In other words if one was an owner in Infosys – as the investor saw it performing quarter on quarter year on year – it would have been smart to keep adding to that position versus trying to find the next Infosys. 

One last thought on this - just as a quick reminder and stretching the friend analogy, as Mama always says “you need to choose your friends carefully”!