Читать книгу The Little Book of Investing Like the Pros - Joshua Rosenbaum - Страница 22

You have identified a compelling idea, performed due diligence, and have a view on what the company is worth. All of this informed your all-important price target. It is now time to make the ultimate investment decision. Is the stock a buy, short, track, or pass?

In the event a buy or short decision is made, the work doesn't stop there. Going forward, the position must be constantly monitored. New developments may materially change the initial investment thesis for better or worse. Effective monitoring involves constant reflection, analysis, and synthesis of events that may impact the underlying business.

Building a sound portfolio requires additional skills beyond just stock picking. Successful portfolio construction involves selecting a collection of stocks tailored to your specific investment goals, strategy, and risk tolerance. This means proper sizing and prioritization of your positions. A large position should reflect its ranking relative to other stocks in the portfolio in terms of overall quality, upside potential (including possible catalysts), and conviction level.

Disciplined investors employ risk management techniques to optimize their portfolios and protect their downside. Key tools include capping exposure levels, as well as setting guidelines for limiting losses and taking profit. Exposure levels refer to individual position sizing, sector concentration, and geographic focus, among others. We also teach you basic techniques for hedging and portfolio stress testing.