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My investment portfolio, market value and position sizing.

Sunday, February 19, 2017


Tachikawa City, Tokyo, was ranked the third most desirable city to live in due to its easy access to central Tokyo. Croesus Tachikawa consists of three basement floors and eight floors above ground. 

I feel that I have been blogging a bit too much recently and it is probably a good idea for me to go offline for a few days.

So, it won't just be blogging that I am avoiding but everything else that requires me to go online to do as well. Hence, I won't be replying to comments and emails either.

Before I go offline in another few hours for the next few days, I should respond to a request from a reader.

Reader:
"I know you won't reveal your portfolio's details. You also won't tell us the size of your portfolio and the average yield."


Now, I know some bloggers share full details of their investment portfolios. I don't know their reasons for doing so. They probably feel comfortable with sharing in detail but I don't.

After some thought, I decided I am comfortable enough to share the sizes of my investments in bands just like how companies disclose remuneration of top executives in their annual reports.


Aqualine Golf Club in Tokyo, an AGT asset.


Based on current market value:

From $350,000 to $499,999:
AIMS AMP Cap Ind'l REIT


From $200,000 to $349,999:
ACCORDIA Golf Trust

CROESUS Retail Trust
FIRST REIT


From $100,000 to $199,999:
ASCENDAS H-Trust

QAF Limited
WILMAR Int'l

All other investments in my portfolio have market values of less than $100,000 each, with many of them being lower than $50,000 each.

Without revealing specifics, this gives an idea of the relative sizes of my investments.


Wilmar went into the sugar business in 2010.

Why did I decide to share in such a manner after refusing to reveal anything more specific for so many years?

I have said before that position sizing is important and how we size our investments should depend on our own circumstances and not someone else's. 

If someone we respect and trust invested $40,000 in a stock, it does not mean that we should too.

We should size our investments in such a way that if it should go wrong, it would not set us back too much. If we should get it wrong, it should not take us a very long time to recover.

So, for example, taken on its own, to most people, it might seem like I have a very big investment in Accordia Golf Trust. However, in relation to the size of my entire portfolio, it is actually not that big.

I have refused to share my portfolio in detail all along because I know some people might just replicate it but probably on a smaller scale. So, I still refuse to do it.

After all, apart from our circumstances, we should also size our investments based on our motivations and beliefs. 

My portfolio suits me. It might also suit some other people but it definitely doesn't suit everyone else.

So, why did I choose to share in such a manner after refusing to reveal anything more specific for so many years? You tell me.

Until my next blog, be good. Practice prudence, pragmatism and patience. Farewell for now.

15 comments:

Arthur Ong said...

Thanks for sharing your portfolio even though it is on a band width way. I think many of us are not expert in investing and we just want a guide from someone who is an expert even though you will brush away the word 'expert'. In the end, those who wish to replicate your holdings (I am one of them), should not put any blame on you as we should be responsible for our own investment. A good stock entering at a high entry price can become a bad investment. Have a good offline rest.

Cory said...

thanks for Sharing. One down in Curiosity level. :)

Komatineni said...

Well, some of those folks who have been following you from early days may end up with similar stocks but diff bands or volume. Respect the wisdom and end of the day what matters is where do a person stand in terms of risks-return.

Bruce said...

Thanks for sharing, AK. Though not surprising, it is still very interesting to know that you have a large % concentration on REITs.

Each one should have one's own take that suit one's need, indeed.

W Y said...

Hi AK,

May I ask what do you see in AGT to place high confidence in its business? Thanks.

sy sy said...

hi ak

have a good rest...
enjoy ur hobbies... manga...anime...planting...
can try to use ur skill futures funds for a short course...
;)

take care

AK71 said...

Hi Arthur,

Yes, we should have a plan, our own plan.

Looking at what others have done could be enlightening in some ways but copying their strategy wholesale could be a bad idea.

AK71 said...

Hi Cory,

I am glad this blog has helped you in that way. :)

AK71 said...

Hi Komatineni,

For sure, everyone should understand their own circumstances and motivations. There is no one size fits all.

AK71 said...

Hi Bruce,

Some REITs are good and some REITs are not so good. I hope I have made the right choices.

AK71 said...

Hi W Y,

I have blogged about AGT many times before in the past. You might want to search my blog for past blog posts on AGT.

I didn't get in during its IPO. I got in at much lower prices.

All investments are good at the right price. ;)

AK71 said...

Hi sy sy,

Thanks very much. I had a good break. :)

AK71 said...

Reader:
Hmm....interesting and give me some food for thought. Your positioning for top holding is give or take 10% of total portfolio. That is very large and makes sense since you are confident. I may be too cautious. My investable portfolio I only allow biggest position to be about 3.5% and that's a bond!!! Equity biggest is maybe 1.8%. I always felt under 2% ensures any disaster can't hurt. In your case 10% can hurt but I guess we can argue that it's well tracked and calibrated risk. Is there data that supports a certain bite size to be optimal? Have been investing 6 years and on equity side only matching msci ac world at about 46%....

AK:
Portfolio size plays a part. My portfolio size is much smaller than yours. A person whose portfolio is worth $20K, for example, might be invested in just 2 counters. Each counter would be 50% of his portfolio.

Reader:
I thought more about this topic. You are right. A few factors at play.
First is whether one can track how many counters well. Second is how large an impact (positive or negative) we can take per individual counter risk. Eg. If say we are very happy with $100k gain per counter vs loss of $50k if cut loss at 20% than bite size is about 250k. Even if that is 2% of equity portfolio that is fine. No need to say must be 1m position cuz the loss of 200k would feel pain.
But at 2% of equity, then need to have 50 counters! Too much to track! So for someone like that , use half index and the other half pick stocks?

AK:
I don't think there should be a hard and fast rule. It depends on what each person is able and willing to manage. It might not be a question of how to optimize returns. It might be simply doing what is comfortable but sufficient for some.

ThinkNotLeft said...

Hi ASSI, do you have a max % where u will trim the position if it exceeds X%?

For example, Sequoia funds now set 20% as the max for any position after the Valiant pharm decline has affected their returns severely.

Personally, I may also follow the max 20% rule.

AK71 said...

Hi TNL,

AA REIT is now 20% of my portfolio whereas it was close to 40% many years ago. I didn't sell a big portion of my investment in AA REIT over the years. The portfolio overall just grew bigger.

If we have identified a good investment, I think it is OK to buy more of it to a point that we are still comfortable. It could be 20% for you, 10% for others and even 40% for me. It is all very personal.

Peace of mind is priceless.

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