Place Sizing: Tips on how to Assemble Portfolios That Defend You

Some investors think the fewer positions you own, the cooler you are. I remember meeting two investors at a conference. One had a seven-stock portfolio, the other had three stocks. Sadly, the financial crisis humbled both. On the other hand, too many positions breeds indifference. At IMA, our portfolio construction process is built from a first-principles perspective.

The post Position Sizing: How to Construct Portfolios That Protect You appeared first on Vitaliy Katsenelson Contrarian Edge.

Continue ReadingPlace Sizing: Tips on how to Assemble Portfolios That Defend You

Why Inexperienced Vitality is a Luxurious Perception – However Gained’t Be One Eternally

Being a rich country has allowed us to develop what some call “luxury beliefs” – ideas that make us feel good but that fail upon contact with objective reality. We ignore inconvenient truths about green energy and keep marching on, trying to convert an even larger portion of our economy to wind and solar, without contemplating the related costs. When it comes to electricity generation, luxury beliefs can be dangerous.

The post Why Green Energy is a Luxury Belief – But Won’t Be One Forever appeared first on Vitaliy Katsenelson Contrarian Edge.

Continue ReadingWhy Inexperienced Vitality is a Luxurious Perception – However Gained’t Be One Eternally

McKesson: Why the Greatest is But to Come

What we have today in MCK is the largest drug distributor in the US, with a very stable and growing business. It is very cash-generative, doesn’t need much capital to grow, and has a very high return on capital. Owning the stock was very stressful at times but also very rewarding. But the best is yet to come for MCK.

The post McKesson: Why the Best is Yet to Come appeared first on Vitaliy Katsenelson Contrarian Edge.

Continue ReadingMcKesson: Why the Greatest is But to Come

I Child You Not Loopy

It seems that every year I think we have finally reached the peak of crazy, only to be proven wrong the next year. The stock market and thus index funds, just like real estate, have only gone one way – up. Index funds became the blunt instrument of choice in an always-rising market. But you don’t have to be a stock market junkie to notice the pervasive feeling of euphoria.

The post I Kid You Not Crazy appeared first on Vitaliy Katsenelson Contrarian Edge.

Continue ReadingI Child You Not Loopy