Just one stock in portfolio

POSTED BY marshaln ON October 18, 2010 7:41 pm COMMENTS (7)

How about keeping just one stock in your protfolio rather than 10/20/30? with investment horizon of 3-5yrs

i know its a very risk proposition, but if company is large cap, and certainly have very good growth prospects in future ?

Has anyone tried that or thought of trying it?

am game for it!

7 replies on this article “Just one stock in portfolio”

  1. sidrana7 says:

    large cap+good growth prospects= index stock.
    which means you can opt to use derivatives and make huge profits based on your pick!

    Albeit risky proposition.

    One thing, large cap, healthy order book, good growth prospects means the stock is already discovered and part of index, meaning the price will be higher meaning higher capital investment required to see credible profits.

    I believe for you FnO may work magic.

    1. marshaln says:

      @sidrana,
      yes in a way index stock give your filtered list, but you cannot have 30/50 odd stocks in your portfolio.. does it make any sense. ?

      How does FnO helps here? i mean if you have investment horizon of 3-5yrs.. these are contracts with a period of one or two months? correct me if am wrong!

  2. marshaln says:

    @gaurang,
    thanks for insight. in know warren buffet has done it once with amercian express and that changed everything for him 🙂

    @rakesh,
    100+ plus stocks man you have lot of work to do.
    well warren has done this in his career.. and that made him wealthy.

  3. rakesh says:

    Marshal, Very good topic.
    Wow just one stock in a portfolio, I don’t think anyone would follow it, not even Buffet.
    My portfolio is more dis-organized, i have over 100 Stocks and 20 MF in my portfolio.

    Rakesh

  4. Gaurang Desai says:

    Yes, it’s a secret of Warren Buffet – ‘Wall Street makes its money on activity. You make more money on inactivity.” – meaning one needs to buy a great co at a fair price or below and hold it for a long time – Diversifying your investments with a hope that all your eggs will not go bad is a protection against your ignorance – “he (Warren) preferred to conc his investments and then he watches them like a hawk !”

    1. Santosh Navlani says:

      Marshaln,

      A tough question to answer, I must say. While your thought is rational, but unfortunately the markets aren’t.

      Lets look at your question & try to answer by narrowing the options. Typically, if you would want to buy only 1 company, you better be sure that this company would be the best return generator over your investment horizion. Or if not best, atleast top 5-10. Right?

      Can you pin point that for stock market?? By that way, you mean that you are significantly sure that there will be only 1 sector (say Telecom) & in that Bharti who should qualify. Or there will be only Power that would post the best returns across all sectors & the company would be NTPC. I doubt if thats possible.

      However, if you become a Venture Capitalist or you can “predict” the future – where you actually know a long-term story & have enough conviction that your returns are going to be 100x or maybe 1000x, this approach may be futile.

      1. marshaln says:

        @santosh
        well as you said very correctly there are leaders in each segment, more examples SBI in bank, bharti in telecom, infosys in IT, maruti/hero honda in auto, LnT/BHEL in captial goods etc. in International mkt like, microsoft/apple in IT, wal mart in retail etc etc good companies

        I totally agree with you on this.

        but, predicting future is something we all know.. no one in this world can do that..

        my point is instead of buying a new stock every week/month, why not spend time and effort in identifying just one..and then just follow macro/micro economics around it.

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