HOW to invest. Must listen IMO

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I agree with that for the portion of your wealth that you want to be aggressive with. I keep 3-4 high conviction positions in the account that carries the highest risk. Risk is relative to age and earnings; if I blow up that account I’ll be pissed but I’ll be fine.

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I’m pretty much set so I don’t really want to frick anything up. All I need is 7 to 8% returns and I’ll have more than enough. I’m still invesitng a decent amount but spending more money than ever. That will slow down in 3 years once I pay off my ranch and wife’s car.

I’m not willing to move a big chunk into individual stocks at this point. My biggest single stock is around 200k. I dabble in my fun brokerage account with y’all on here but split that into VGT.

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I turned 100 into 200 (and then 450 and then back to 200 ) and that current account is all I’m willing to be aggressive with. I made myself agree to never under any circumstances add cash to that account. All the rest of my money is either in indexes, sector specific funds or cash. I made one exception last month and full ported a dormant money market balance into a single stock, that I have full conviction in and I’m as certain as I can be that I bought it at the bottom. But that’s it

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Sounds my gamecoin days??. I put 10k into game coin and another 30k into random arse shite coins. Had over 800k at one point and bought and sold myself down to maybe 15k now . Hit 90k after Trump got elected and should have cashed out but let it ride for the 100th time.

ZETA

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Hint: Concentrated, high conviction investments, is THE way.

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It can be, but this can certainly lead to subpar results or worse. Conviction needs to be backed by something substantial and ideally quantifiable, not hopes and dreams. If you don't have that, then you're exposing yourself to very serious risks that may not be apparent at first but will manifest in the long run. Diversification lowers the ceiling, but it also raises the floor.

This board is not particularly sophisticated (exceptions obviously exist). It is above average, and based on my memory, thus doing the good work of telling working and middle class people to diversify and index invest to avoid blowing up and/or getting below-average results. That is a good thing for this board to be since the gap between that and having earned the right to high conviction is significant and, in my opinion, means getting past the point of supposed sophistication of blindly trusting a number of ratios and formulas.

To give an example of having proper conviction, I have a trading system for the S&P 500 index that achieves, unleveraged, 80% of the index returns while only in the market 35% of the time. It can blow up if trading at half Kelly, and it has a disappointing Sharpe Ratio of just 0.5 to 0.7. That sentence will scare off many institutions and sophisticated investors, but the Sharpe ratio was meant for quickly examining one's overall portfolio and discriminates against all volatility, even upside volatility. The profit factor is 1.75, and it achieves a 20% CAGR at 3x leverage, at which it is neither overfit to the historical data nor at risk of blowing up. I could spit out some more numbers, but the point is I can have conviction because the data supports it, and I understand why when it doesn't.

I am not saying all this to appear elitist or to brag. I'm trying to add this disclaimer: if you are going to concentrate your portfolio, you better be certain you understand what you're doing, not relying on hopes and dreams or thinking you know more than you do. Otherwise, you risk becoming wallstreetbets or LTCM.