 Good day, fellow investors. Today we'll talk about a very, very important topic but often not so discussed because it's much more exciting to talk about individual stocks. A subscriber of my stock market research platform was concerned about my portfolio management because I said I will go to only eight stocks and he has a million in his portfolio and he asked the following question. So what I said in my last portfolio transaction was I think I'll go to max eight positions after that I will replace the worst position depending on business quality and risk reward when I find something 50% better. So the first question from our subscriber was to put it simply if your investable amount right now was one million euro instead of 100 000 would you still be looking at max eight positions there's a few of us on your platform that have considerable cash positions to invest myself one million australian dollars all self made from zero in eight years on real estate little skill mostly dumb or see luck. So on my platform I have two portfolios the 100 000 lump sum portfolio that is a fixed amount where the goal is to maximize return based risk reward of course and the other is a 10k portfolio that I started almost a year ago where I add 1000 per month so two portfolios this is the lump sum so really focused on risk reward and the part when I add the money is a little bit less focused on risk because I add constantly money so I know I will play the game tomorrow. Back to the question yes whatever would be the amount in the portfolio I would stick to maximum eight positions because I really believe that diversification as what Buffett say is for those who don't understand what they are doing as I'm a full-time market researcher I constantly look at markets I try to really get under the skin of the businesses of the stocks that I invest I think and it has been working really well over the past 17 18 years for me I really believe that I can find good and better risk reward investments and I can focus my money in the top eight which includes deep analysis which includes waiting for those to hit the right price entry price usually that implies a 15% business returns no matter what happens in the market in the sector over the long run and if I would go to 20 40 stocks that would simply dilute the best returns that I hope to achieve with the best stocks for now I have been successful in doing that so I think that by continuing with what I do working hard we can continue that the 100k portfolio is money that I don't plan to use for the next 20 years so really focused on stock market investing and secondly it is so important for me because I'm building a track record and if over the next five ten years I really show okay this strategy of value investing of waiting patiently for opportunities going there where others don't want to go delivers 15 plus returns per year over five ten years then whatever I will be doing will be easy so the value for me personally is much more than 100k it's a billion of over a lifetime because if I deliver on what I'm doing I will be a billionaire over the long term I'll still I'm still young so I have the time to work on that going to the next question this in turn may be a result of choosing not to manage outside money your risk reward relationship with your own capital has now evolved now it's not my own capital it is simply that I really want to focus on research which will be the base of an investment fund that I might start down the road one two five ten years from now when I have completed my research why I'm not I'm not starting a fund now even if I had a lot of questions and a lot of interest about it is that if I manage would manage let's say a 13 million dollar portfolio I would have to be with the client on a phone call every week every three percent move in the portfolio complete portfolio checking after every month because after all it's their money so I'm working for them now I can really focus on the portfolio research working on building that risk and reward maximizing the reward for as little risk as possible or balancing that risk in the portfolio as my focus is on that I am unbiased I'm not influenced by other people so I'm really independent and I think that's the focus for good long-term investment like Warren Buffett had owning Berkshire so I might not even start to fund I might launch a small Berkshire get to 100 million in starting capital talk to clients just once a year on a nice conference and in the meantime just build build compounding that value so I'm still not decided on that so it's still difficult to grasp for our subscriber and this raises an interesting question will you continue to track previous lump sum positions you have moved out of as I will have only eight positions max if the answer is yes just stop reading so it's clear that the person here doesn't want to risk only of eight stocks he wants 20 30 percent 20 30 position portfolio so if I will track that okay the question here is okay am I going to continue to track everything yes my goal is to track 100 stocks and of those 100 then be invested in the best eight at that moment in time replacing switching whatever needs depending on the risk reward I'm going to follow also 100 stocks so I'm going to continue to cover those that I get out and then get back in or so because I always want to get back in if the price allows that so even if somebody wants to have 20 30 positions in such a big one million let's say lump sum portfolio you can do that you can do that based on my research but I really believe that the focus with less positions will be to maximize return in relation to the risk and that if you go owning 20 stocks you're actually increasing the risk because stock number 17 cannot be as good as stock number three so if you have 3 percent or 5 percent in stock number three and 2 percent in stocks number 17 I simply prefer 5 or 10 percent or 15 percent in stock number three because it's simply a risk reward and there aren't that many good investments out there by the way if you want to see all my portfolios there is my stock market research platform link in the description below 28 day no questions asked money back guarantee so you can check all my positions all my research see whether that fits your investment style or not and then if not ask your money back if yes we're going to build a compounding machine over your and our lifetimes a question on risk reward in the current market so for whatever reason your risk reward has been skewed further in favor of reward and thus might begin to diverge from my own as I'm already 60 invested in this market as I have found six investments since we started a lump sum portfolio I think the investor here thinks that I have been chasing risk and here it comes to very delicate situation I see risks everywhere cash is not a risk is a certainty of permanent capital loss because cash due to inflation loses value constantly so I have to be invested there opportunity costs even if I wait for a crisis I don't know when it will come so I'm really focused okay when you find value that fits a good risk reward 15 yield you buy it and then you manage the position lately if it goes down you're happy because you can buy more if it goes up you see okay should I buy something else or not so that's the point stocks individual stocks are very volatile over a year the market not so much but stocks are so there are plenty of opportunities waiting for those opportunities to arise and then buying let's say when there is blood on the streets but when you see value on the streets too so depending I'm don't know where will my portfolio be in six months I'm it depends on what will the market offer to me if the market offers me another two three bargains and then my stocks drop I will simply buy more because I'm pretty sure about what I am buying plus the portfolio is well diversified on a global scale a little bit focused on emerging markets but there are some defensive stocks so anything that happens can be balanced out between there some stocks go up and down some stocks is already what 30% up so I might trim that to buy something else and things like that so the basis of everything is value if we can find the value that usually puts a bottom to permanent capital loss volatility is something you have to accept not as a risk but as opportunity volatility is not risk even if academics say so risk is okay this business is going down or the business will not deliver the returns we expected risk is permanent capital loss permanent volatility is not risk and when you look at that I really believe eight positions sharp focus and then you can achieve more than the market if you dilute yourself spread yourself on more positions then you are more likely to be like the market if you are not a money-making machine like Peter Lynch but what Lynch did on 100 stocks 50 stocks one can also make on 8 9 10 stocks but those were other times let's say so thank you for watching I'm really looking forward to your comments on this how do you feel there is always the part of personal portfolio risk reward what is your personal connection because at the end money managing is always personal it's not something abstract it's personal because it's your money it's your life it's your portfolio and each of us has a different perception of risk thank you for watching looking forward to your comments check the platform if you haven't already and I'll see you in the next video