Just watched a fresh video by Ben Felix and though to share it here
Excellent content
I personally set some stop loss to secure profits for overconcentrated positions that I hold
2 Likes
Nice, thanks for that.
So 25 stocks is enough to reduce volatility but for a better chance of beating the market you should hold 250 stocks. And you should have a plan to deal with large single positions. Of course those positions get large because their value did rise since the purchase.
Just checked, I own 63 stocks. In two mechanical managed portfolios where every detail is planned ahead, including how to deal with big single positions. But still, I have one position that is almost 5% of my total holdings.
I deal with big positions differently: in my dividend portfolio I have the market dividend concept. When a single stock reaches 6% of all stocks in that portfolio I sell down to 5%.
Now, in my momentum portfolio I search for more risk. I partly sell after gains of 500%, 1000%, 1500% and so on and after every 12 months of holding. Risky business but profitable business tooā¦
BTW: the part that most single stocks donāt beat the market is true. In my momentum portfolio my mechanics make me sell most stocks after 6 months with a loss. This is just the cost of doing businessā¦
1 Like
Actually another video showed that 88% of portfolio managers are not able to beat the index anyways over the 10 year period and this number further increases as time period goes to 20 years
Looks like you are amongst the lucky few 
For curiosity- Whatās your XIRR for last 20 years for full portfolio (all together div strategy + momentum) ? And is your benchmark S&P 500 or VT?
I feel like it may have been luck. The time is too short. The dividend portfolio is not high performance but should be low volatility and high cash flow. The momentum portfolio however should be high risk high performance.
Should be, the time is too short. I do the dividend portfolio since 2014 and lived off it until this year. The momentum portfolio I do since 2020 and live off it from this year on, as it did overtake the dividend portfolio in value. Compounding in action.
All number net, debt interest and withholding tax already discounted, in US$. The XIRR for the dividend portfolio is 10.15% since 2014 and 12.50% since 2020. The XIRR for the momentum portfolio is 26.59% since 2020. The combination is at 17.03% since 2020. All calculated with the XIRR function of google calc.
I compare with SP500, Nasdaq, Dow and Russell2000. The XIRR numbers for those since 2020 are 12.06%, 18.29%, 7.71% and 4.72% respectively.
The Nasdaq 100 would have beaten my combination, but with a terrible volatility. My momentum portfolio is the winner but also with lots of volatility and probably pure luck due to kind of concentrated positions and still short time, only 5.5 years. But the main winning point is position size: I always start with the same size and sometimes double down. If that happens to a big winner it lifts up the complete portfolio. High risk, high reward.
The Nasdaq100 is mechanical, that is good. But it uses market cap based position size. This means the biggest winners are bought in very small quantity before they start their run up and in very big quantity before they start their decline.
BTW: the comparison to indices is not fair, I should use a total return index. But it is just for fun, wonāt change anything if I under- or over perform.
1 Like
Another point which seems to say the contrary of the video: the Russell2000 seriously under performs all other indices. The XIRR since 2012 is 8.12%, this year it is still in the red. Even the other extreme, the Dow 30, did better with 9.76%.
In video they were talking about Russell 3000. Not Russell 2000
OK. My point was just that the index with most stocks in my comparison did worse.
Yes I agree
You need to use Total return S&P 500 to compare which is easiest to find.
Maybe in few years, you can trademark your strategy
Wow! You are managing 60+ holdings?
I have a satellite portfolio with 1 main ETF and then 9 individual stocks around but I could not manage 60+ at all!
What about the momentum portfolio? Are these growth stocks? PLTR? Etc
Actually the management of the investments is fully automated. The stock picking in the momentum portfolio is fully automated too.
Check out my thread about mechanical investment strategies:
1 Like
Duh ā¦?
No disrespect, but does the video say anything substantially different from what we all most of us know and what Buffett expressed as follows for how his wifeās inheritance should be invested after his passing in his 2013 letter to Berkshire Hathaway shareholders?
āMy money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions Iāve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wifeās benefit. My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguardās.) I believe the trustās long-term results from this policy will be superior to those attained by most investors ā whether pension funds, institutions or individuals ā who employ high-fee managers.ā
Apologies that I didnāt watch the twenty minutes of the video, but it just seemed obvious to me from the get-go that the likelyhood of learning something new was low (and maybe Iām wrong ĀÆ\_(ć)_/ĀÆ ).
[?] The effects of diversification have been documented academically for about fifty years1 and appear in just about every textbook, including the standard one about Modern Portfolio Theory.2
I donāt even agree with the theoryās main assumption behind diversification ā they use volatility as a measure for risk ā nor their use of math ā they calculate with variance instead of absolute difference (which amplifies outliers due to squaring) ā but directionally itās kind of obvious that diversification helps ā¦ aka not all eggs in one basket?
[2] Elton, Edwin J., Gruber, Martin J., Brown, Stephen J., Goetzmann, William N., āModern Portfolio Theory and Investment Analysis,ā John Wiley & Sons, 9th edition (2017).
No disrespect but maybe you are a little bit disrespectful?
You spent some time preparing your post but you didnāt find worthy watching a 20 minutes video that many suggested?
If you watch it and still think his points are trivial to the majority of investors, then may you are the smartest and/or most educated guy here. (Not a bad thing at all )
1 Like
Apologies if I came across as disrespectful.
I have now watched the video but, sadly, I still consider myself the dumbest guy in the room, and Iāll stick with the points made in my previous post. This insight came at a small price of only 20 minutes of attention dedicated to YouTube and their Ads displayed.
Iāll add that I continue to be suspicious of people ā especially if they are Chief Investment Officers ā that seemingly need to post YouTube videos to ā¦ well, I donāt know, perhaps they are just really altruistic in educating the public versus my skeptic thought of them wanting to draw attention to their funds? Maybe thereās better explanations.
Anywho, again, no disrespect, but I didnāt learn anything beyond what Warren said in 20 seconds.
Iām not saying itās a trivial insight ā although, it kind of is not super complicated, either, again citing the basket with all eggs in it ā but I (personally speaking) donāt need someone speaking very fast for 20 minutes to convince me of something that I consider as obvious (as academically demonstrated for half a centory now, again sorry).
Letās agree to disagree on the merits of this content? You find it excellent, I would use a little lower rated adjective, even if I donāt disagree with the videoās content.
Apparently you havenāt watched any of the almost 300 Rational Reminder podcasts. Not necessarily bad.
Sure. Excellent? I donāt know. Certainly great for the majority of stock pickers I know.
BTW did you see Ads? Never seen ads in his videosā¦
I even had to look up āRational Reminder podcastsā ā¦ 
ā¦ so ā¦ guilty as charged: no, havenāt watchend them.
My bad. I quoted the original poster who labelled the video as excellent content. Nowhere did you label it as such.
Huh. I saw a forced ad on some new Audi car and a second forced ad about a device that I can apparently plug into my houseās AC electricity network to save ā¦ I donāt remember exactly, but authorities apparently want me to not learn of this device to save ā¦ I also donāt remember, but directionally, a significant percentage of my electricity bill.
In short: the usual crap. Aside: isnāt it incredible that one of the most sophisticated technology companies ā Alphabet, part of the mag 7 ā seemingly needs to show such ads in order to add to their top line revenue?
@Your_Full_Name
You are right. Ben Felix is obviously also doing marketing for their company. They do charge 0.75% management fees + TER fee. Management fees goes down for higher size portfolios.
They do have a vested interest in promoting index funds as they are also core of their business model.
However I think the good think about the videos from Ben Felix is that they are backed with data and research. So people can also make up their own decisions.
In the end everyone who posts on YouTube is looking for something (fame, money, both). Altruism exists only in rarest of cases. For example I feel Khanacademy is altruistic
1 Like