RE: Mark Minervini IBD Interview
(2019-05-19, 03:38 PM)isatrader Wrote: An interesting podcast interview with Mark Minervini on the IBD website this week. Good discussions about position sizing, focusing on 2 to 4 positions instead of diversifying and being uncorrelated with the market etc. See episode 10: https://cms.megaphone.fm/channel/KM97202...6840956954
A couple of things I noticed there with regard to number of positions and position sizes:
With regards to the number 10-12 was tops for a very large portfolio, so I think 2-4 was nearer the bottom end, so perhaps I did not take away the same message as yourself, but I think lower rather than higher numbers of stocks was the takeaway.
Secondly, it appeared to me from the interview that you would end up in those large positions by scaling into your really good performers, and you'd also be looking at selling part positions when you felt it was a appropriate. So rather than just buy and then sell when appropriate you'd be doing more buying and selling, as conditions dictated, of a smaller number of positions.
The logical outcome to me on the discussion on position sizing, given the example that a stock buy worth 10% of your portfolio with a 10% stop loss would lead to a risk of 1% of your portfolio, is that if you did not scale in to a stock then you'd end up with 10 positions if you went fully to stocks. But with scaling in you could go larger and presumably wait for later continuations or pullbacks to enlargen the position and still control risk. I presume the trick here is to see how a position evolves and whether you'd be content to enlargen your position.
At least that is my take on the interview.