Concentration

  • 07 Jul
    What We Can Learn From Seth Klarman’s Current Portfolio

    What We Can Learn From Seth Klarman’s Current Portfolio

    • You might call them boring businesses, but with a bit of portfolio rebalancing and buying more on the dips, Klarman’s positions will probably deliver his required 20% return per year over the long term.
    • In the U.S., he is overweigh LNG, refineries, communications, and pharma.
    • A few investing lessons can be derived from his current portfolio.

    Introduction

    As much as I hate bureaucracy and filing required market regulator forms and various statistical Central Bank inquiries, I must say that I love when others do it as I can get a pretty tasty free lunch from it.

    You probably know that an institutional fund manager has to disclose their U.S. portfolio positions in a 13F form no longer than 45 days after the end of the quarter with some exceptions. For example, when the manager thinks that disclosure would significantly affect share price, they can postpone disclosing, but we can get a pretty good picture of the things a specific fund is doing. More →

  • 21 Jun
    Diversification vs. Concentration

    Diversification vs. Concentration

    • Index funds and diversification have worked extremely well in the past 35 years, however their success can be thanked to geography, as we hear only about the success in the U.S., and to declining interest rates.
    • If the S&P 500 had the same earnings yield as when the Vanguard fund gained traction, it would be at 557 points, yes 77% below current levels.
    • It’s better to wait in cash than buy a diversified index fund now.

    Introduction

    Some investment gurus advocate spreading your portfolio across various asset classes in order to limit your risks for the same return. On the other hand, others say diversification is for idiots and for those who don’t know what they’re doing. I’ll analyze their arguments and see what the best option is for you. More →