Better to concentrate

Many of the investors I follow advocate concentration and run extremely concentrated portfolios. For example, Warren Buffett says that he operated mostly with five positions. From the other end of the spectrum, momentum trader Mark Minervini, who I have become interested in recently due to his quite stunning results and apparently quite straightforward and intuitive strategy, advocates a similarly concentrated portfolio.

I am happy with the performance of my strategy so far but I have begun to question whether perhaps I can do better through concentrating my portfolio on fewer investments. Continue reading