Here is how many investors envision the process of buying a title. The Manager shall conduct an analysis of the company. It will consider its annual reports, evaluate the competition and management. He will look for articles or research on the title in question, in order to make a better decision. Then, if the title passes all the tests, he decided to buy it, but more importantly, it sets a weighting. For example, it may seek to buy at 5% of the portfolio..

However, this approach has a significant gap. In many cases, research approndie stops once the title is purchased. We did a little research, we buy, and wait! It is normal in such a scenario that diversification is necessary, since knowledge of the security is not high enough to be comfortable with a weight of say, 25 %.

We personally prefer to use a method that more closely resembles the process leading to marriage between two people. When two people meet and like, they do their research first. An exchange of information takes place: what are they doing in life, what are their aspirations, etc. Then, a second meeting took place. The marriage did not occur in a short time! Since this is something serious, so take the time to know the person before committing funds.

One can draw parallels with the actions. When we find a way to interesting features, we often take a starting position. This can be between 2 and 5% of the portfolio. Despite our preliminary research, it is 100% certain that we will know more after six months initially.

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