Lessons From 2008: Know When to Bet Big
In this third and final installment of the key lessons provided by the 2008 market selloff, we come to a topic that is arguably one of the most debated areas of investment management: portfolio allocation. But before diving in, read the first lesson on cash management and the second lesson on investing in pessimism, if you haven't done so already, as they provide a framework for what comes next.
Before the market selloff in 2008, I held a rather narrow view with respect to portfolio concentration: bet big on your best ideas. Truly fantastic investment ideas are hard to come by, and when you are presented with one, it makes little sense to waste it by tiptoeing in. Keep in mind that ideas that pass this test are rare -- finding just one every year would be considered a great success rate. This was the case when I stumbled on Premier Exhibitions (PRXI) nearly four years ago when the company had a market cap of less than $50 million, yet owned RMS Titanic assets that could be worth anywhere between $150 million and $300 million or more....415 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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