Key insights
- The author, a professional trader, advocates for investing solely in large-cap companies, viewing them as diversified portfolios of internal ventures. This approach is chosen for its perceived risk mitigation and potential for higher returns through selective stock picking, contrasting it with broader index investing like the S&P 500. The strategy emphasizes the resilience and innovation capacity of large corporations.
Hey everyone,
just wanted to share my view on investing.
I'm a professional trader, so I am kind of supposed to be a risk-taker, but when it comes to investing, I only stick to the largest-cap companies because I see each one of thm as a portfolio of well-protected startups operating under the same roof. I mean, if one of them fails, it's not a big deal for the company as a whole. They can absorb it and move on to the next opportunity. With their enormous resources, they constantly innovate, invest in new projects and grow.
You'd probably ask why not just S&P500. Two reasons:
- Ethical: I prefer to choose the companies I own 2. Less companies -> potentially higher returns if I pick well.
What do you all think? Does this make sense for a solid investment approach?