Hello,
I am new to this group but i would like some feedback on a
strategry i have employed for 2 years now, most value investors would
be diversified between 3 and 10 stocks as suggested by warren buffett.
however if you only picked 1 stock at a time, your best pick, deeply
researched, would your returns not exceed those of many value
investors who also outperform the market. hypothesis, if ten value
investors picked 1 stock each, their best pick and another ten value
investors diversified as per above i am convinced the 1 stock group
would perform the other stock group as a whole, i believe warren
buffett did so well in his 21 to 26 age period of life because he used
a similar system to this and he did huge research, any feedback on
this theory would be greatly appreciated as this group is likely to be
way more succesful in the market over the coming years than the
average person. p.s. i have put this theory into practice over the
past two years with some interesting results, my stockpicking isn't of
true value investing, my first pick late September 2005 Ditech
Networks at €7.50, it fell to €6 but i sold at €11 5 months later for
a 40 gain, this was picked for sudden drop in revenue and shareprice
reacted the same, one of ben grahams philosophies although too pricy
for him,
Pick 2:
Pilgrims pride Corporation in Febraury at 21.35, fell to €20, sold 2
months later at €26 for 20% gain, outbeak of avian flu, nothing to do
with company performance
i picked chiquita at 17 after this and put in one fifth of my net
worth, dropped to 13.50 and put in full net worth, dropped then to 12
and stayed around 12-14 for long time, recovered to 16 after ships
sold, sold all, made about 20% in a year and a half but lost on
dollar
Pick 4: Ditech at €7 went to €10 tried to sell at €10.20 in two after
i bought, price dropped currently at €3.44 at time of writing this.
still hold
Please discuss