That’s a great way to highlight that compounding prevails over the long term. It all boils down to understanding which businesses are capable of compounding versus the ones that are not.
Really good thought provoking post René. The majority of stocks we select will go on to underperform, just due to the nature of base rates. Be it multiple contraction, top line / bottom line deceleration, whatever, even the best of the best only get it right ~40-60% of the time.
What matters then is ensuring the winners can do the heavy lifting - let the winners run (always easier said then done!).
How do you think about position sizing in this context?
I don't have a strict system I follow here. Sizing is more based on my assessment of the downside (and upside), conviction, trajectory of outcomes, etc. It's more art than science for me.
That’s a great way to highlight that compounding prevails over the long term. It all boils down to understanding which businesses are capable of compounding versus the ones that are not.
Yes! Which is easier said than done.
💯 But asking the right question is a problem half solved. 😉
Really good thought provoking post René. The majority of stocks we select will go on to underperform, just due to the nature of base rates. Be it multiple contraction, top line / bottom line deceleration, whatever, even the best of the best only get it right ~40-60% of the time.
What matters then is ensuring the winners can do the heavy lifting - let the winners run (always easier said then done!).
How do you think about position sizing in this context?
Around 10 names is my sweet spot.
Does that then imply a 10ish % position for each?
I don't have a strict system I follow here. Sizing is more based on my assessment of the downside (and upside), conviction, trajectory of outcomes, etc. It's more art than science for me.