Why I own more than 100 stocks.

(5 reasons)

Q: Is 100+ stocks, ETFs, and cryptos the right answer for everyone?

A: Heck no! Know thyself.

Here's the rationale for why I do.

Like shirts in my closet, I always think I should have fewer stocks than I do...

But every time I look to clean house, I find too much joy to keep fewer than I do.

Shhhh...don't tell @MarieKondo.

Reason 1: Ego is my biggest risk.

For 2+ decades, I've had a job, kept spending in check, and saved.

Barring some catastrophe, I should continue to reach my financial goals...

UNLESS I get cocky and do something like go all-in on 10 "can't-lose" stocks that do.

Reason 2: Keeps FOMO at bay.

Having a little bit spread out into interesting industries and companies helps inoculate me against chasing those returns AFTER the fact.

Reason 3: Learning feedback loop.

Having skin in the game on a bunch of stocks forces me to pay more attention to them and learn more.

That knowledge across industries helps me analyze individual stocks with better context/less myopia.

Reason 4: 💎🙌

Large holdings: Still a fairly small percentage of my portfolio so I don't lose as much sleep when they fluctuate.

Small holdings: Often easier to just leave them be to give them the chance to earn a larger share. Happened this year with many SaaS stocks.

Reason 5: I have the time and I enjoy it!

Having fewer positions would be less interesting (partly b/c I'm wired to prefer more breadth/stimulus).

I'm someone who gravitated to do this for a living, after all...when your work and your hobby align...

Thanks for reading...good luck on aligning your portfolio with your personality!

Here are the other ways I think you can diversify (without owning 100+ stocks)...


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More from @anandchokkavelu

11 Apr
How to think about cash as a stock investor.

Here, I'm NOT talking about:
1) Your cash safety net (you should have one!)
2) Using cash/ST bonds vs. low-yielding LT bonds for asset allocation purposes

I'm talking about excess cash you're purposely holding instead of investing it in the stock market

The opportunity cost is the same whether you think of excess cash as "dry powder" (waiting for opportunistic deals) or "market timing" (waiting for a market dip to buy).

Read 10 tweets
2 Apr
My system for saving.

(Savings rate > 20% per year)

First, the personality quirks my system has to manage:
1) Fortunately, I get nervous if I'm spending more than I'm making. No problems saving vs. spending "bonus" money.
2) I hate the constraints of a constant daily budget.
3) I get excited for sprints, tired of marathons.

On my wife's side, she basically doesn't want to think about money. She might not be able to tell you our net worth within 50%.

That means I manage all the finances and am the "no" person.

On the other side, I have close to full freedom in our investment allocations.

Read 6 tweets
28 Mar
Thought experiment: What would you do if you had to double your current annual savings?

(My answer threaded)

We're (family of four) already pretty strong savers, so doubling would mean considering pretty big things.

1) Moving to a lower-cost city/area...we live in the DC area, so most cities are cheaper (I could move to a few different cities and still keep my current job).

2) Leave a job I love for one that I'd like less if it paid more.

Read 10 tweets
27 Mar
The story of the most money I ever lost on a stock.

As part of the Great Financial Crisis bailouts, many of the banks gave the government warrants to share in the upside of the bailouts.

In this case, think of warrants as 10-year call options.

The government turned around and sold those warrants to the public.

Having covered the space, banking was theoretically the sector I knew the best at the time.

And I was an enthusiastic buyer of many bank warrants.

Some did well but any market-beaters were wiped out by this move...

Read 8 tweets
20 Mar
3 ways to save you from yourself...

(a $$$ thread)
I'm pretty good with money but awful with desserts.

To save me, cookies need to be (in order of effectiveness):
1) At 7-11 instead of the house, so I'll be too lazy to get them
2) Hidden by my wife
3) In a cupboard vs. counter

Here are three similar money tactics...
1) Hide the password if you shouldn't touch it

A friend once gave me his brokerage password and told me to change it.

When he wanted to do something ill-advised, he'd have to sheepishly ask me for it.

Not generally advisable unless it's a spouse. But maybe a safe deposit box?
Read 6 tweets
14 Mar
What is an NFT?

(A thread with the simple answer + examples with pictures)

Note: Guessing the examples will be most helpful.
First, why you're hearing so much about NFTs...

B/c the prices are so eye-popping and because different NFTs seem to be popping up every day, even in the mainstream.

Christie's auction house just sold a piece of digital art as an NFT for $69 million!!! (it's an example below)
NFT = Non-fungible token

Non-fungible means the items are unique and can’t be equally exchanged for another (e.g. digital art)…vs. fungible like Bitcoin.

An NFT is just about anything digital that has been put on a blockchain. You can trace authors, owners, and buy/sell them.
Read 14 tweets

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