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Survey: Market cap of the companies you own?


Liberty
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I'm just curious to know what's the size of the companies most of us are investing in. There seems to be lots of discussion about large caps lately, but I don't know if it's representative. Not that there aren't great deals to be had all over the size continuum, but I'm still curious.

 

I'll start: 100% of what I own is sub-1-billion in market cap. In fact, 2/3 of those are sub-500m in mkt cap.

 

What about you? What's your ratio between small-mid-large?

 

Edit: I expect most people to have all kinds, but if you could provide a rough ratio, that would satiate my curiosity better than "all over the place". Thanks :)

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Over half my portfolio in sub-$50m market caps and over 2/3 in sub- $1b but I also own some BRK and another large cap. If I could allocate it totally freely today and had no liquidity constraints, I would be likely be more weighted towards large caps. But selling in the miniscule increments that you can get at this moment in time would probably not make much sense. High friction costs and I don't think the value difference is THAT big. Time will tell, maybe I'm rationalizing :)

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Mostly equity stock below $200 million.  On the larger cos (multi b$ firms), I typically hold LEAPs versus the underlying.  FFH is my largest equity position.

 

Packer

 

Packer,

 

How do you view your investment when holding a LEAP vs a stock? Say you have a 5% of portfolio allocated to a LEAP which might be say equal to a 20% nominal portfolio exposure to that investment, do you think of it as having invested 20% of your portfolio or do you just view it as a 5% allocation?

 

Although it depends on the attractiveness of the opportunity, do you limit your LEAP allocation to a certain percentage of your total portfolio? I would think a 50% allocation of portfolio to LEAP would introduce a very high degree time sensitivity to the portfolio.

 

I recently moved towards making most of my investments via LEAP balanced with a very high cash percentage and just wanted to get your thoughts as you seem to have a similar approach.

 

Thanks

 

Vinod

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In some cases I have replaced equity exposure if I have a better return investment but for the most part I like to buy cheap LEAPs on cheap stocks (ala FFH a few years ago).  I have found one that I am invested in now EXC LEAP and in the process of examining another.  With these position I purchase the longest LEAP available at a slightly out of the money strike and treat like an equity position.  If the stock approaches a resaonable upside, I like to get 5-8x returns. Since these positions are more risky than most I limit purchases to 5 to 10% of portfolio at most.  I will invest maybe 2 to 3% of portfolio at max in a LEAP position.  So my down side on a portfolio basis is 2% but the upside is 10%+ per position.

 

Packer

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Smallest is presently under $850K... The biggest is about $1.5 billion. Generally, I tend to stay with really small companies, but, that doesn't mean that if I saw a better value in the $100+ billion market, that I wouldn't go there. It's just that they never tend to sell at such a discount to their liquidation value, or, even at a super low multiple of earnings to come.

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In some cases I have replaced equity exposure if I have a better return investment but for the most part I like to buy cheap LEAPs on cheap stocks (ala FFH a few years ago).  I have found one that I am invested in now EXC LEAP and in the process of examining another.  With these position I purchase the longest LEAP available at a slightly out of the money strike and treat like an equity position.  If the stock approaches a resaonable upside, I like to get 5-8x returns. Since these positions are more risky than most I limit purchases to 5 to 10% of portfolio at most.  I will invest maybe 2 to 3% of portfolio at max in a LEAP position.  So my down side on a portfolio basis is 2% but the upside is 10%+ per position.

 

Packer

 

Thank you!

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