Number of positions held, and buy points below current price

Michael DiMascio
Jun 13, 2023 11:43 PM 0 Answers
Member Since May 2023
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Hi Marty!

  1. With the many actionable buy points, how do you keep yourself to buying only 8-10 positions?

I post stocks that I believe are near their buy points. But, that does not mean I am buying all of those stocks. The number of stocks to own depends on how much capital we are working with. An account below $25,000 should have no more than 3-4 stocks. In an account with $100k or more, in a market like this, a concentrated portfolio of 8-10 stocks is appropriate.


2.When you list a buy point that is below the current stock price, do you mean that its actionable IF the stock drops to within 105% of the buy point?

In regards to the buy point; a stock is actionable within 5% of a buy point. For instance if I post a stock with a buy point at $100 it is actionable from $95.00 up to $105.00. Anywhere within that range is actionable. I try to be flexible and not rigid upon entry if I really want to own a stock.  I always sell at at 5% loss no mater what. If I buy a stock at $100 and it trades down to $95.00 I sell as the market is telling me that I am wrong.

3 Do you usually commit 10% of your total account value to an actionable stock at its buy point? Or something less on initial purchase at the buy point and then bring it to 10% later if it behaves well?


Position sizing is critical. In an uptrending market (like we have now) when entering a stock I usually buy at least a 5% position and often times 10%. A 2% position just does not have enough impact. A stock like SMCI with a 10% position at $95 will grow  quickly in your account at $250, and that is a good problem to have. It is wise to trim at that point and keep the size below 15%.

In a downtrending market I will be a 2% "probe" position just to treat the waters. But, that was 2022 and not this year's market.

I hope this answers your questions. These are great questions by the way...




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