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  5. CSU: Good Morning Peter, Ryan, and 5i Team. [Constellation Software Inc.]
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Investment Q&A

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Q: Good Morning Peter, Ryan, and 5i Team.
My question is regarding position weightings. I have trimmed TFII once since I have owned it but it continues to run and now represents about 8% of the account it is in. (Thank you so much for the original recommendation) I have owned CSU since $88 (Thanks again) and trimmed it along the way as well. After the last time I trimmed CSU I vowed to never trim it again unless Mark Leonard sells out or the wheels really fall off. How do you approach position weightings when the trend is your friend ? Thank you for your ongoing help. DL

Asked by Dennis on July 26, 2021
5i Research Answer:

It is a tough (good problem) and we don't like to get in 'our own way' when a name is working out well, which is why we like to let a position run. Overall in our view though, portfolio decisions tend to trump the company specific ones and we don't like a portfolio becoming a bet on one or two stocks. The right mix also comes down a lot to personal comfort. Our general rule, when a position runs and becomes a larger piece of a portfolio, is we look to agressively trim it back to a regular weight once it hits the 8% to 10% range. This can be frustrating as a company continues to go higher but one day a company will hit a tough spot and if the weighting is not kept in check, it could impcact one's entire portfolio. We are of the view that ANY stock could decline 50% in an instant, and one can ask themselves how they would feel in that scenario, when considering individual weighting sizes.