Note: We have seen the risk of holding too few stocks for hedge funds. Bill Ackman's Pershing Square lost heavily due to concentrated exposure to Valeant. Similarly, another fund run by an Indian lady lost heavily. She also runs a concentrated portfolio.
What people say, what they end up doing
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I liked reading Dhandho Investor from Mohnish Pabrai of Pabrai Funds in 2007.
I was trying to go through checklists made by others and found a PPT from Pabrai Funds. After getting pummeled in 2008, Pabrai Funds decided to avoid investing in four stocks, “unwise to hold 4 stocks” as per this checklist presentation.
Went to Guru Focus and checked 3o-June-2016 portfolio. Looked like a four stock portfolio.
Checklist PPT
30th June 2016 Portfolio of Pabrai Funds as per Guru Focus
Nothing wrong with 4 stock portfolio. Just saying…
