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rickytan Veteran	15-Sep-2006 08:17        rickytan About Contact  Quote this Post!
x 0   x 0  Alert Admin	It is easier said than done. In reality, it is very difficult to practise especially so for newbies.  Furthermore, to be able to do your own FA and TA analysis, one must be very knowledgeable in these analysis.  One must know how to read financial reports/statements. I understand that it is also not straight forward reading financial reports as sometimes it has been "dressed up".  So for newbies like me, it is not easy.  I therefore very much appreciate all veterans and gurus advice given here.  Although new,  I am learning more day by day...
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teeth53 Supreme	14-Sep-2006 19:37        teeth53 About Contact  Quote this Post! Style: Flexible   Mood: Yells: "don't learn through life, learn to grow with life "
x 0   x 0  Alert Admin	This(S^_^$) (^_^) (^\/^) ($`_.`$) (~_~) and this (@_@) (`@/_@`)
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teeth53 Supreme	14-Sep-2006 19:24        teeth53 About Contact  Quote this Post! Style: Flexible   Mood: Yells: "don't learn through life, learn to grow with life "
x 0   x 0  Alert Admin	One thing that ppl never learn:)). Learn how to stop been greedy. how not to be too greedy and when to stop been greedy.
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allantanhc Veteran	14-Sep-2006 18:43        allantanhc About Contact  Quote this Post!
x 0   x 0  Alert Admin	Very well said and good advice, Nostradamus. There is a lot of wisdom in what you posted.    Hey, you should be conducting courses on share trading.
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Nostradamus Supreme	14-Sep-2006 17:52        Nostradamus About Contact  Quote this Post!
x 2   x 0  Alert Admin	How many stocks you hold depends on your investment style and not on your time frame. Are you an active or passive investor? An active investor is one that constantly monitors the market and acts accordingly. A passive investor is one that adopts a hands-off approach. Maybe, he's just lazy or too busy to monitor the market. He's likely to leave his stocks for months or years without monitoring. Consider the challenge of picking one winning stock correctly. You must first find companies with the best profit and sales growth, headed by a good management team, with breakthrough products and services. If you can nail down the fundamental side, you must then find a stock from a technical analysis point of view. Now you need to time your buy right, grabbing shares just as the stock crosses its optimal buy point in heavy volume. Even after all that research, a market downturn can negate all your hard work, erasing gains and producing losses. A final consideration is that, to be a responsible investor, you'll need to follow your companies' progress at least once a quarter, reading news reports, financial statements, and annual reports. If you own stock in 30 companies, this can be very hard or even impossible to do. Most people find that between 5 and 10 companies is a manageable number. If it takes that much discipline to find one winner, here's the big question: What makes you think you can find 20 or 30 winners? Keep things simple. Focus on a handful of leading stocks rather than a broad swath of names and you'll give yourself the best chance to nab strong gains. The tables below show the pitfalls of diversification vs. the upside of a focused portfolio. If you only need to buy a few stocks, you can narrow your search considerably. A sharper focus allows you to eliminate flawed candidates and find winners more often. Having too many stocks doesn't lower your risk, but lowers your potential gain. In Warren Buffett's Bershire Hathaway fund, 10 stocks make up 85% of his shareholdings. And that's how he made over US$40 bln over the decades. In conclusion, an active investor should hold not more than 5. Having more stocks will require more time and effort. Focusing on a few winning stocks will increase your profit margin. You, alone, are responsible for your money. Hence, you owe it to yourself to adopt an active approach. However, if you are a passive investor because you're too busy, then you should hold not more than 10 for diversification sake and reduce your risk Having too many or too few stocks doesn't lower your risk, but lowers your potential gain. If you can't check the stock prices daily, then at least check weekly. Cut the losers from your portfolio.
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Nostradamus Supreme	14-Sep-2006 17:42        Nostradamus About Contact  Quote this Post!
x 1   x 0  Alert Admin	At the other extreme, let's say that you hold 25 stocks, with about $2,000 in each, for a portfolio total of $50,000. Each stock represents 4% of the portfolio's value. Imagine that one of your holdings doubles to $4,000. But since it was such a small part of your total portfolio, its astonishing 100% surge will boost your portfolio by only 4%. If you hold only 10 stocks ($2,000 each) and one of them doubles in value, your portfolio will gain 10%. See the difference? There's no absolute best number of stocks to own. Too few and you've taken on too much risk. Too many and you've reduced your profit margin by more than you had to. If you have 20 stocks ($2,000 each) and your portfolio performance is as in Table 1. Now, imagine that you only bought 8 ($2,000 each) of the best performing stocks as in Table 2. From a loss of 5%, your returns improved dramatically to a profit of 71.9%! The same principle applies if you are disciplined in following the stop loss rule. Selling your laggards quickly gives you more money you can then use to add shares of your top 5 picks at opportune times. As long as you buy smaller lots of shares the further you get from the initial breakout, you can successfully pyramid up when a leading stock shoots to big gains in a healthy market. So, you see that only 8 of your 20-stock portfolio are breaking even or making money. Your 12 losers have diluted the big gains of your 5 best picks. Overdiversifying or underdiversifying is more likely to hurt your portfolio than to help it. Stock A $2,600 Stock B $2,400 Stock C $2,500 Stock D $4,000 Stock E $6,000 Stock F $1,800 Stock G $1,500 Stock H $1,600 Stock I $200 Stock J $100 Stock K $1,000 Stock L $500 Stock M $3,000 Stock N $800 Stock O $100 Stock P $500 Stock Q $2,000 Stock R $1,000 Stock S $5,000 Stock T $1,400 Total $38,000 Profit / Loss -5% Table 1. Portfolio of 20 stocks Stock A $2,600 Stock B $2,400 Stock C $2,500 Stock D $4,000 Stock E $6,000 Stock M $3,000 Stock Q $2,000 Stock S $5,000 Total $27,500 Profit / Loss +71.9% Table 2. Portfolio of 8 stocks
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Nostradamus Supreme	14-Sep-2006 17:37        Nostradamus About Contact  Quote this Post!
x 0   x 0  Alert Admin	It's almost as bad to be overdiversified as underdiversified. Some purported experts recommend diversifying as a way to lower your risk. That can give you a false sense of security. If you average down or fail to cut your losses in a bear market, you could bleed cash in a hurry. Let's look at some examples to see how this works. Imagine that your portfolio consists of just two stocks, Stock A and Stock B. You have $10,000 tied up in each, for a total of $20,000. If Stock B's stock price suddenly drops to half what you paid, your portfolio's value sinks to $15,000. It falls by 25%, just because of one stock's move. If you hold just 3 stocks ($10,000 each) and one of them drops to half of your purchase price, then your portfolio's value sinks by 16.67%. That's exposing yourself to quite a bit of risk. To reduce your risk, adopt the stop loss rule as mentioned under the Sell Rules.
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ten4one Master	08-Sep-2006 13:33        ten4one About Contact  Quote this Post!
x 0   x 0  Alert Admin	Hi lewsh88, Your loss is only 6% - not that bad really! I suggest you review all your counters carefully and straight away 'dump' all the no-hopers and then gradually those 'not-too-good performers' and free-up your 'opportunity' capital for new-discovered hopefuls or maybe increase your current good Performers' holdings. Whatever you do, try to review your counters and keep track as often as you're comfortable with their performances. If you trade, you must anticipate (right or wrong) and take action accordingly. If you're the 'wait&see type' (no offence), I suggest you quit trading. Now, who say making money is easy? Cheers and best wishes to your next trades!
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singaporegal Supreme	08-Sep-2006 10:11        singaporegal About Contact  Quote this Post! Style: Technical   Mood: Yells: "Female TA nut"
x 0   x 0  Alert Admin	This is a good thread. lewsh88, This is my own opinion only - I feel that you EITHER practise short term OR long term trading and NOT both at the same time. It therefore doesn't make sense to me to hold 2 portfolios - one for long term and the other for short term. If you do that, the danger is that you may become confused because the trading philosophies are very different. Confusion leads to bad investment or trading decisions.
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jessie Senior	08-Sep-2006 10:03        jessie About Contact  Quote this Post!
x 1   x 0  Alert Admin	I have previously attended a seminar and the advice is to hold not more than 10 stocks in your portfolio.
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lewsh88 Senior	08-Sep-2006 09:52        lewsh88 About Contact  Quote this Post!
x 0   x 0  Alert Admin	Thanks everyone for your views. Summarizing from your input, the contention is: 1. To keep 3 to 5 good counters for long term investment. 2. To have 3 to 5 for short term trading counters. 3. For the long term counters, whenever the price is good, they should  be sold and bought back again when the price has gone down. I am a lousy trader. I presently hold 18 counters all of 10 to 20 lots each, total portfolio about 250 grand cost and paper loss about 15 grand. I shall gradually reduce to a more manageable level as the above contention.
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ten4one Master	08-Sep-2006 07:13        ten4one About Contact  Quote this Post!
x 0   x 0  Alert Admin	It all depends on the counter and the available spare cash in my pocket - it could vary from 5 to 50 lots.  I could have 500 lots on 1counter too.....get what i mean? The thread starter wants to know how many COUNTERS are ideal to have at any one time. In other words manageable comfortably. So we try not to wander off..kekeke. Cheers!
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tonersweat Member	08-Sep-2006 03:26        tonersweat About Contact  Quote this Post!
x 0   x 0  Alert Admin	hi wander when all of you mention the number of counter, how many lots you all are referring 1 lot for each counter. People can have 100 lots of only one counter
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teeth53 Supreme	07-Sep-2006 20:44        teeth53 About Contact  Quote this Post! Style: Flexible   Mood: Yells: "don't learn through life, learn to grow with life "
x 0   x 0  Alert Admin	As many as about 10 including newly ipo stocks and as little 2-3, a few stocks has been laying untouch for many years (near 0 value in $$$).
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ten4one Master	07-Sep-2006 18:18        ten4one About Contact  Quote this Post!
x 0   x 0  Alert Admin	For trading, I share S'poregal's view. As for my long term (3-12 mths) counters, I've about 5 and not more than 7 which I only review when 'things' changed. Sometimes, my long term counter could fall into my trading portfolio; and if that happened, I'd sell-off together with my trading at the same time and buy back later (as long term portfolio) if 'ideas' still unchanged as b4.  Cheers!
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Nostradamus Supreme	07-Sep-2006 10:35        Nostradamus About Contact  Quote this Post!
x 1   x 0  Alert Admin	I hold not more than 5. I focus on a few stocks and am an active investor. I do my research on a few good stocks. Having more stocks will require more time. Holding more stocks reduces my profit margins. I rather focus on a few winning stocks. If you are a passive investor, then you should hold not more than 8 for diversification sake and reduce your risk. Here are a few quotes from Warren Buffett: "Diversification is a protection against ignorance. It makes very little sense for those who know what they are doing." Wide diversification is only required when investors do not understand what they are doing." Warren Buffett dedicated his life to becoming the best investor he could be. That is why he focuses and does not diversify. He does not need to protect himself from ignorance simply because he has invested time and money to understand what he is doing. If you look at anyone who has achieved great success and wealth, people like Warren Buffett, have all focused intensely in order to win.
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singaporegal Supreme	07-Sep-2006 10:18        singaporegal About Contact  Quote this Post! Style: Technical   Mood: Yells: "Female TA nut"
x 0   x 0  Alert Admin	Hi lewsh88, I usually hold not more than 3 counters at one go. Holding too many makes it difficult for a TA practitioner to monitor the portfolio. Also, I feel that too much diversification results in mediocre profits.
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lewsh88 Senior	07-Sep-2006 08:22        lewsh88 About Contact  Quote this Post!
x 0   x 0  Alert Admin	singaporegal, teeth53, shplayer, Nostradamus, others, How many counters do you hold at any one time? Any ideal numbers? Thanks.
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