Active TopicsActive Topics  Display List of Forum MembersMemberlist  CalendarCalendar  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin

Fundamental
 The Equity Desk Forum :Market Strategies :Fundamental
Message Icon Topic: Diversified vs Concentrated Portfolios.. Post Reply Post New Topic
Page  of 27 Next >>
Author Message
Equity Buff
Senior Member
Senior Member


Joined: 30/Aug/2006
Online Status: Offline
Posts: 223
Quote Equity Buff Replybullet Topic: Diversified vs Concentrated Portfolios..
    Posted: 17/Sep/2006 at 9:31am
Dear Basant,
 
In DNA money supplement Dt. Sept 15th, Mr. Anoop Bhaskar fund manager of the best performing Equity fund in India this year Sundram BNP Paribas Select Mid Cap fund has 104 stocks in his fund, more than double the number held by his closet rivals. He has said in the interview that "you have to diversify your portfolio, especially when investing in Mid Cap companies".
 
In the same article Mr. Suresh Soni, fund manager of DWS Alpha Equity Fund, the fourth best performing equity fund this year says" Its always nice to spice up your portfolio with some mid caps in the hope of higher returns but I would stick to large caps for our bread and butter".
 
Would like your views on Concentrated portfolios versus diversified portfolios and also if you could post any results of studies which may have been done on concentration versus diversification.
 
Rgds
Equity Buff
 
IP IP Logged
Vivek Sukhani
Senior Member
Senior Member
Avatar

Joined: 23/Jul/2006
Online Status: Offline
Posts: 6675
Quote Vivek Sukhani Replybullet Posted: 18/Sep/2006 at 7:47pm
Basant has a study on diversification and risk management.He has studied, how many scrips lead to how much risk avoidance.
 
Diversification, if suitably applied does help in conservation of wealth but even there you need to have some sort of a concentration, else you will become an index and never be an outperformer.But here I would like to tell you 1 thing... while trying to conserve wealth, you may end up with more wealth most of the times.... thats whatsurprises me!!!!Thats because, while trying to conserve, you adopt such rigid formats and standards that you end up having creme de la creme and which more often than not surprise you quite positively.
 
Basant, will be glad if you can re-post that original post of yours. Even I was searching for it, but was not able to locate it.
 
Vivek


Edited by Vivek Sukhani - 18/Sep/2006 at 7:48pm
IP IP Logged
Equity Buff
Senior Member
Senior Member


Joined: 30/Aug/2006
Online Status: Offline
Posts: 223
Quote Equity Buff Replybullet Posted: 18/Sep/2006 at 8:16pm

Dear Vivek,

Thanks for your post.
 
The debate is not only about Diversification or Concentration but also about whether Mid Caps should form a majority of ones portfolio(high %age of total invested amount in Mid caps) and also whether one should have a concentrated or diversified portfolio in Mid caps or should majority of ones portfolio be mainly Large caps with some Mid Caps thrown in for a kicker ?
 
As we know chances of getting a serious multibagger are in small & mid caps.
 
Rgds
Equity Buff
IP IP Logged
Vivek Sukhani
Senior Member
Senior Member
Avatar

Joined: 23/Jul/2006
Online Status: Offline
Posts: 6675
Quote Vivek Sukhani Replybullet Posted: 18/Sep/2006 at 8:47pm
I fully endorse your views.However, while loading mid-caps you have to be extremely choosy.Also, while choosing mid-caps instead of the top-down approach, bottom-up approach is far more advisable.Also, the mid-caps which throw up the maximum surprise are the one which belong to the out-of-favour sector.In short, playing mid-caps demand you to be a grater contrarion than while you are playing large caps.
I am myself a very big devotee of mid-caps.I also agree, there wo;; a;ways be more valye in mid-caps and you will have more bang for your buck in mid-caps.However, if inappropriately chosen, your portfolio can get banged.
IP IP Logged
Equity Buff
Senior Member
Senior Member


Joined: 30/Aug/2006
Online Status: Offline
Posts: 223
Quote Equity Buff Replybullet Posted: 18/Sep/2006 at 9:44pm

Dear Basant,

 
Will appreciate your views on my 2 posts on this subject. Also kindly repost your earlier post which Vivek is refering to in his post.
 
Thanks.
IP IP Logged
basant
Admin Group
Admin Group
Avatar

Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
Quote basant Replybullet Posted: 18/Sep/2006 at 9:53pm
Sure just been really tied up with something would do it absolutely. Sorry..
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
IP IP Logged
Equity Buff
Senior Member
Senior Member


Joined: 30/Aug/2006
Online Status: Offline
Posts: 223
Quote Equity Buff Replybullet Posted: 18/Sep/2006 at 10:01pm
 
Many thanks Basant. Pls take your time.
 
Rgds.
IP IP Logged
Ajith
Senior Member
Senior Member
Avatar

Joined: 06/Aug/2006
Location: India
Online Status: Offline
Posts: 1284
Quote Ajith Replybullet Posted: 18/Sep/2006 at 10:49pm
Buffet advises a concentrated portfolio but that is only for those with superior abilty and those choosing syocks with sustainable competitive advantage at a discounted valuation and with a very longterm approach and thats not easy.For lesser mortals ,those choosing midcaps which will hopefully become large caps a larger portfolio which can be pruned later may be the better option.

Edited by Ajith - 18/Sep/2006 at 10:50pm
Ajith
IP IP Logged
Page  of 27 Next >>
Post Reply Post New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum



This page was generated in 0.110 seconds.
Bookmark this Page

Join Theequitydesk.com Today!

It’s easy to Join and it’s free.

Here's why members would love to be a part of theequitydesk.com

  • Equity Desk focuses on why to buy shares and invest in share rather than what to buy.
  • Live discussion forum wherein members can discuss the current Indian share Market trend, BSE Sensex or the Nifty Index.
  • Have huge cache of information on Indian and World Share Market.
  • Analysis of Indian stock market, Global events, Investing insights, portfolio management strategies and thoughts,
  • Meet investors from round the globe check their investing strategies share experiences and learn for their experiences on stocks and shares, evaluate opinions on investing in India.

Register now while it’s free!

Already a member? Close this window and log in.

Join Us           Close