Investment Q&A

'Aiming' for a double in 1-3 years is naturally going to involve high risk and high volatility, and we highly doubt one can protect against big drawdowns along the way, simply by design. One could short an index as a hedge but if one 4 stocks are owned it is unlikely any index will be a good hedge since concentration is so high in owned positions. The other strategy (diversify and sell half on doubles) can be good for controlling risks, of course, and if a stock runs then it is easier to let it run, knowing you have your initial capital out. But starting with much lower position sizes will lower total returns vs the other strategy, on the assumption that the four stocks chosen are good ones. We prefer a combination of the two. We are fine with higher weightings, and do not see the need for 30 stocks, certainly. But we would like to see 10 to 15, so there is sector diversity at least. It also depends on the investor. Many investors say they can handle 10% single stock positions, but change their minds quickly at the first real correction. We would see these as interesting for such a strategy: GOOG, BN, SHOP, NBIS