Position Sizing
topic on 3 shows · 9 statements across 8 episodes
We Live to Build 
the Knowledge Project 
Capital Allocators
9 statements about Position Sizing, every show
Baker: Extreme single-stock concentration turns a fund into a single stock
“If you have a 35% position in one stock, and then your second position is three or five percent, you're not a fund, you're a stock.”
Fallows: Post-windfall investors should allocate only 0.5% to 1% per position
“So I would just start a little bit smaller. You know, put one percent or half a percent to position, not five or 10%, so you get a little exposure and experience and decide what you'd like without having made huge investments or, again, huge spending.”
Mauboussin: Fundamental investors lack structured, quantitative position sizing
“I think most fundamental investors have some sense of why their position sizes are what they are, but in a sense, they're not quantitative or they're not completely structured.”
Cook: Sunriver generates alpha from selection and sizing, not tactical trading
“It really showed that we're adding a lot of value in security selection and a large amount of value in Sizing and really not much value in trading at all. Good news was we weren't destroying value in trading, but we weren't adding a lot of value in trading.”
Greenblatt: Being too timid on rare good ideas is investors' biggest mistake
“Position sizing is the most important thing. Being too timid on the few good ideas that come your way is like the biggest mistake people make.”
Greenblatt: Position sizes are determined by downside risk, not upside potential
“The biggest positions I've had are not my best ones. The ones that I think will go up five or 10 times. I'm really looking down, not up when I take a big position. So in other words, I will size the position larger if I don't think I can lose much money.”
Mauboussin: Portfolio managers underperform by ignoring their own position sizing rules
“Even there's some evidence if you ask portfolio managers to write down Ex ante, what rules they should follow to size their positions. A, they don't follow those rules, and B, there's evidence that they did follow their own rules, they would do better than the…”
Mauboussin: Position Sizing Drives Portfolio Performance More Than Stock Picking
“Like, you and I can have the exact same 25 stocks, but what we know is how we size our positions will have
A huge impact on how our portfolio performs over time.”