Everyone perceives risks individually. Everyone tries to independently assess the risk of a share or the current economic situation on the stock market.
In portfolio theory, risk is primarily measured using the standard deviation. In simple terms, this is the extent to which a share price moves. If this movement is correlated with the "market", this results in a beta. If this is < 1 bedeutet das, dass der Kurs einer Aktie geringer als der Markt schwankt. > 1, the result is a disproportionate fluctuation. The "market" is an elastic term. For example, an MSCI World, S&P 500 or the DAX can be used as a reference. The result is different betas depending on the index. However, I do not want to go into this topic any further at this point.
Why beta is not relevant for me
- Price fluctuations are not a problem in my current life situation (24 years old; student).
- Every share that grows faster than the market has a beta > 1. As my portfolio is set to grow, a high beta is desirable.
Diversification as a risk?
I often see portfolios with 30+ companies on Getquin. The aim behind this is to minimize risk. In my view, however, what gets lost in the process is the overview - or leisure time, because every share in the portfolio should be tracked and scrutinized.
I have therefore opted for a clearly structured portfolio. There are currently 11 companies (but the number is not set in stone). There are two reasons for this:
I want to know and follow each company in my portfolio well
The impact of a price increase should be significant
My strategy for less drawdown despite fewer shares
- Cover as many sectors as possible
- Consider regional sales distribution
- Know a company as well as possible
Why these companies?
- Heidelberg Materials $HEI (+0.91%). Local monopolies with strong pricing power
- Medpace$MEDP (-0.32%). Enabler of small research/pharma teams. Enables research outside of Big Pharma
- Hims and Hers$HIMS (-1.79%). Generics seller with "cool brand". Enables better margins in the long term.
- MercadoLibre $MELI (-0.32%). The Amazon and bank of Latin America. To benefit from the rise of emerging markets.
- Meta Platforms$META (-0.38%). Monopoly in communication/social media.
- Prada$1913 (+2.46%). One of the few luxury companies that is constantly growing (and not highly valued). More on this in my last post.
- BATS$BATS (+0.84%). Non-cyclical business model. Bought at the time due to significant undervaluation. Now I hold the share to stabilize the portfolio somewhat.
- Sanlorenzo$SL (-0.43%). Yacht manufacturer and thus part of the luxury sector, which I find attractive due to its high margin and low cyclicality.
- Solaria $SLR (-3.71%). My conservative bet on rising energy demand through AI.
- Metaplanet $3350 (-0.98%). Bitcoin gamble with play money.
My criteria for buying shares
Basically, I hardly set myself any limits when investing. I like to invest in shares that are rather unpopular at the time of purchase. The sector doesn't matter, although I prefer high-margin business models.
I like to buy cheap - high P/E ratios put me off (even if FOMO sometimes kicks in). I don't feel comfortable with it because of the potential drop.
Wow. Thank you for reading this!
Now that you know my strategy, I would really appreciate some stock tips tips, that could fit my strategy.
By the way, can you see the portfolio? Because it's my own post I can't check it👀
