For the most part, we prefer diversified investment portfolios.

That can feel quite boring, but over the long run, it absolutely works.

In any given moment, however, it is forever a disappointing-feeling-of-compromise.

Good outcome on risk, wish I’d had more growth.

Bad outcome on risk, wish I’d had more defensives.

Every now and again, when the conviction aligns with the valuation, we will take a material swing at an idea, but they are quite rare, and we don’t tend to make them structural (i.e. holding on to them no matter what’s happening in the broader cycle).

It is the same with stocks and sectors.

At one stage, we had a double-digit active bet on Energy when oil was at $20bbl, and held until around $100bbl before unwinding it all.

In part, the reason such swings are rare, is because the market is generally efficient. It’s not usually forever mispricing a given trade, like say an Amazon over the past 20 years.

By contrast, some managers will routinely have double-digit top 5 holdings. They really swing for the fences, with all the zero-to-hero (and just as often, back again) that comes with it, as if the portfolio holds at least 5 Amazons.

For the most part, that’s not us.

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This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

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