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Anonymous Size of your Portfolio Poll


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How much money are you managing?  

576 members have voted

  1. 1. How much money are you managing?

    • 0-49k
    • 50-249k
    • 250k-1m
    • 1m-10m
    • 10m+ (professionals I assume here)


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Based on a reply to Moore's post in the YTD thread, I thought I'd get an idea of the board's port sizes--particularly individuals.

 

In the other thread you said

 

I'm not sure I understand the above, as I doubt many people on this board are dealing with < 50k (although I'm not sure what your threshold is).  It seems like most people here are not just playing with small amounts.

 

Hopefully you now realize the logic behind my comments as your poll confirms that the majority of the posters are managing $100k or less... I have been around the game long enough to know that nobody generates 50-100% returns consistently with significant aum.

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Based on a reply to Moore's post in the YTD thread, I thought I'd get an idea of the board's port sizes--particularly individuals.

 

In the other thread you said

 

I'm not sure I understand the above, as I doubt many people on this board are dealing with < 50k (although I'm not sure what your threshold is).  It seems like most people here are not just playing with small amounts.

 

Hopefully you know realize the logic behind my comments, as your poll confirms that the majority of the posters are managing $100k or less... I have been around the game long enough to know that nobody generates 50-100% returns consistently with significant aum.

 

I'd like to see how it turns out with more sample size, but even so, I personally don't see how my returns would be different at any size (until professional).  Perhaps other people treat lower sums differently than I do though.

 

Are you just indicating that people are willing to risk more at lower sums?  If that's not it, how does 50k versus 500k make a difference?

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Are you just indicating that people are willing to risk more at lower sums?  If that's not it, how does 50k versus 500k make a difference?

 

I don't think it is just the size of portfolio.

 

When I was 30 just started working, I had a 2K portfolio and I am ready to risk it all. Now that I am 45,  I don't feel comfortable risk 100% of my portfolio any more.   

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I think Eric's post in the other thread makes the most sense in terms of risk profiles.

 

I am always surprised that such a large pool of intellectuals have such a difficult time grasping the difference between managing $50k or $50mm.. I have elaborated enough on this topic. For those that believe that you can replicate those returns I suggest you start your own funds maybe you will be in the next copy of Jack Schwagers market wizards!

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I think Eric's post in the other thread makes the most sense in terms of risk profiles.

 

I am always surprised that such a large pool of intellectuals have such a difficult time grasping the difference between managing $50k or $50mm.. I have elaborated enough on this topic. For those that believe that you can replicate those returns I suggest you start your own funds maybe you will be in the next copy of Jack Schwagers market wizards!

 

Ok, well I guess I missed the part where you explained it earlier, so I'll take it as a loss.  In any event, I didn't say 50m, I said the difference between 50k and 500k.  Certainly there is a huge difference between amounts of money that move a stock price or compete with volume and what not (e.g., professional managers such as yourself), but individual investors aren't at that level.  For individuals, I think Eric's comment makes the most sense and is how I view my own tiers of situations. 

 

Regardless, in the other thread, you indicated 300k was a "decent amount of capital", so perhaps I'm just not understanding what you mean?

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I think Eric's post in the other thread makes the most sense in terms of risk profiles.

 

I am always surprised that such a large pool of intellectuals have such a difficult time grasping the difference between managing $50k or $50mm.. I have elaborated enough on this topic. For those that believe that you can replicate those returns I suggest you start your own funds maybe you will be in the next copy of Jack Schwagers market wizards!

 

Ok, well I guess I missed the part where you explained it earlier, so I'll take it as a loss.  In any event, I didn't say 50m, I said the difference between 50k and 500k.  Certainly there is a huge difference between amounts of money that move a stock price or compete with volume and what not (e.g., professional managers such as yourself), but individual investors aren't at that level.  For individuals, I think Eric's comment makes the most sense and is how I view my own tiers of situations. 

 

Regardless, in the other thread, you indicated 300k was a "decent amount of capital", so perhaps I'm just not understanding what you mean?

 

Starting with $50m, one could set aside $10m in BRK and risk the other $40m.  Life would hardly be handouts and jobs at taco stands if the $40m went to zero.

 

Perhaps soon we'll get to a point where the large cap financials don't trade at such low valuations -- perhaps then it will be exceedingly difficult to earn large returns on $40m invested.

 

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Yes I will explain what I meant. Portfolio construction that achieved an 11% return on $300k most probably could have been replicated on a larger amount of capital (maybe as much as $5mm) but for the guys saying they earned 50-200% this year it had to have been on much less capital. It would be rather unlikely to construct a portfolio that earned 50-100% this year on a $50-100k portfolio which could have been replicated on a decent sized portfolio.

 

 

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I think Eric's post in the other thread makes the most sense in terms of risk profiles.

 

I am always surprised that such a large pool of intellectuals have such a difficult time grasping the difference between managing $50k or $50mm.. I have elaborated enough on this topic. For those that believe that you can replicate those returns I suggest you start your own funds maybe you will be in the next copy of Jack Schwagers market wizards!

 

Ok, well I guess I missed the part where you explained it earlier, so I'll take it as a loss.  In any event, I didn't say 50m, I said the difference between 50k and 500k.  Certainly there is a huge difference between amounts of money that move a stock price or compete with volume and what not (e.g., professional managers such as yourself), but individual investors aren't at that level.  For individuals, I think Eric's comment makes the most sense and is how I view my own tiers of situations. 

 

Regardless, in the other thread, you indicated 300k was a "decent amount of capital", so perhaps I'm just not understanding what you mean?

 

Starting with $50m, one could set aside $10m in BRK and risk the other $40m.  Life would hardly be handouts and jobs at taco stands if the $40m went to zero.

 

Perhaps soon we'll get to a point where the large cap financials don't trade at such low valuations -- perhaps then it will be exceedingly difficult to earn large returns on $40m invested.

 

And how do you get to the $50mm? Either you have earned that money by investing in which way my argument is you cannot do so investing in a manner that would have generated 50-100% on a $50-200k portfolio.. there will be pull-backs where the leverage kills you and you will be wrong too at least once in your career. So the other option is to be a fiduciary and raise $50mm in which case you are just going to "risk" the other $40mm of other people's money and all know how that is going to end!

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Yes I will explain what I meant. Portfolio construction that achieved an 11% return on $300k most probably could have been replicated on a larger amount of capital (maybe as much as $5mm) but for the guys saying they earned 50-200% this year it had to have been on much less capital. It would be rather unlikely to construct a portfolio that earned 50-100% this year on a $50-100k portfolio which could have been replicated on a decent sized portfolio.

 

Didn't Ericopoly just say in the other thread that he did 110% on what I assume to be a few millions?

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Yes I will explain what I meant. Portfolio construction that achieved an 11% return on $300k most probably could have been replicated on a larger amount of capital (maybe as much as $5mm) but for the guys saying they earned 50-200% this year it had to have been on much less capital. It would be rather unlikely to construct a portfolio that earned 50-100% this year on a $50-100k portfolio which could have been replicated on a decent sized portfolio.

 

Speaking for myself, the smallest company I invested in was mid cap, now at a 2.8 B market cap, so I think mine was scalable to multiple millions.  I presume Eric could (and maybe did) scale to multiple millions as well (maybe not with his fancy options though).  Isn't Berkowitz > 30% ytd now?

 

I absolutely agree with you once you get to sizes where purchases cannot be bought in a single day or it becomes hard to accumulate positions (e.g., can't buy small caps), but wouldn't that limit be up near the 5+ million range in general? 

 

Said another way, once individuals hit a level where the money matters (I'll go with 50k), and until they reach a significant amount of capital (I'll go with 5 million), how different is it?

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Moore is right.  Managing other people's money is different.  There are both legal and size issues among others.  Heck, I've a hard time buying reasonable amounts of some stocks for my own portfolio.  They'd not really be options for a 1B AUM fund. 

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Moore is right.  Managing other people's money is different.  There are both legal and size issues among others.  Heck, I've a hard time buying reasonable amounts of some stocks for my own portfolio.  They'd not really be options for a 1B AUM fund.

 

Oh absolutely, perhaps I've been misunderstanding him, but I thought he was also talking about individual's ports, from the context of the other thread.  I would not have done what I did with OPM, though it would be reproducible up to large sums.

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Either you have earned that money by investing in which way my argument is you cannot do so investing in a manner that would have generated 50-100% on a $50-200k portfolio.. there will be pull-backs where the leverage kills you and you will be wrong too at least once in your career

 

Okay, but my personal 401k+IRA+RothIRA started out higher than $200k on the day I retired in January 2008 and today it is up to slightly more than 11x.

 

I'm not going to mention the price starting figure in 2008 because I don't want to be too specific on divulging net worth.  I've mentioned previously that roughly 50% of my net worth is in my RothIRA.  So by stating that it started at 200k and is up 11x, I'm already conceding that my net worth must be at least $4.4m today.

 

So supposing I hold a 100% notional position in BAC and the common stock price triples in 5 years.  Then at that point it's only yet another triple from $40mm.

 

And, of course, supposing I started out with more than $200k in my tax-advantaged accounts in early 2008... 

 

 

 

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Either you have earned that money by investing in which way my argument is you cannot do so investing in a manner that would have generated 50-100% on a $50-200k portfolio.. there will be pull-backs where the leverage kills you and you will be wrong too at least once in your career

 

Okay, but my personal 401k+IRA+RothIRA started out higher than $200k on the day I retired in January 2008 and today it is up to slightly more than 11x.

 

I'm not going to mention the price starting figure in 2008 because I don't want to be too specific on divulging net worth.  I've mentioned previously that roughly 50% of my net worth is in my RothIRA.  So by stating that it started at 200k and is up 11x, I'm already conceding that my net worth must be at least $4.4m today.

 

So supposing I hold a 100% notional position in BAC and the common stock price triples in 5 years.  Then at that point it's only yet another triple from $40mm.

 

And, of course, supposing I started out with more than $200k in my tax-advantaged accounts in early 2008...

 

Not sure I followed all the suppositions, but I will say that if you in fact turned $200k to $2.2mm+ in less than 4 years I am very impressed and you are truly an outlier. As for continuing to invest in this manner and/or achieving similar returns, I wish you the best of luck and hope you can follow on those fantastic results! I will only say that from a purely economic stand point if you can achieve those results you should lever up your personal returns by starting a fund and commanding an incentive fee. I am fully aware that not everybody cares about being a fiduciary and/or dealing with all the bs that comes with managing other peoples money but I just think that having such an audited track record would do you wonders and supercharge your already incredible compounding machine!

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