I used to hunt single stock names.
My last "successful" bets were:
1. AAPL. I got in after Jobs died, and P/E was ~10, with $80k. With dividend reinvestment, growth and P/E expansion, that position is now worth $400k+.
2. INTC. I got in @<$20 many years ago. No p/e expansion yet, but growth pushed it to $60. Not bad, not great either.
3. NSC. Railroads were relatively cheap around 2009/2010 (not as cheap as 2000, but still), so I bought $10k. It's grown 3X+ now.
Of course, may other bets I placed failed (XOM, GSK, IBM, WFC) and some others have been in the "meh" territory (BAC) so far.
Now that I am so overweight AAPL (if I count the index fund components - I have $500k+ in AAPL), I am looking to diversify that position over the next year or two.
My investment philosophy:
(Feel free to shoot as many holes in it as you prefer. "Constructive" ideas are more useful for me, and hence welcome.)
1. Investment return is driven by (exponential) growth, not linear processes. So, there is no reason to invest if growth is not the primary focus.
2. Risk of failure is magnified when an asset is overvalued. So, don't bet > 5% of net worth on single stocks with PE > 20. When a specific stock provides high conviction and compelling value (e.g. AAPL did after Job's death), going in with a much larger % may be okay.
3. Index funds minimize single stock failure risk, and yet provide exposure to all growth stocks. So, S&P 500 index is my "default" option.
4. My risk profile is very aggressive till I reach my (crazy) definition of "Lean FI" @$2M in liquid, invested assets not earmarked for anything else. After I go lean-FI, my risk stance will go down to merely "aggressive" and I will need to learn about the world of Fixed Income investing.
So, where to move the money (ignoring the default option of VOO for the time being)?
1. VOO/FXAIX? This is the default, after all.
2. VUG?
2. VOX?
3. VGT?
4. MSFT? Yes, another compelling growth name comparable to AAPL. It is much better to be diversified into AAPL and MSFT than be all in only one of them.
5. GOOGL? Similar to AAPL/MSFT in growth potential + valuation. If we are talking about diversifying among similar names - 3 is better than 2.
5. MU? Another tech name I have been following for years. It never hit my cutoff point for buying - so I have not so far. But I do expect it's profits (and hence stock price) to skyrocket 2X/3X once the memory prices come back from the slump + it has a potential growth driver in X-Point memory.
What do you think I should do?