Erik Wetterling, Founder and Editor of The Hedgeless Horseman website, joins us for a nuanced conversation on how he approaches value-shuffling and position-sizing within his portfolio. One of the key points he makes is to constantly look at the percentage risk versus reward that may change as sentiment moves share prices and valuations around, when the fundamentals may not have changed. Also, we discuss how the risk/reward setup can change drastically after key company news points to discovery or key milestone and then the propensity of evidence is for there to be greater value creation in the coming news releases, warranting taking on a larger position size.
Another key takeaway from his portfolio management strategy is not to pull profits too soon in an early-stage evolving story, and to really let the winners run big in his portfolio. Erik points out that sometimes investors are so happy to have finally made a profit, that they exit too early, missing out on the true multi-bagger potential. In his experience, it has always been a few big outperformers in his portfolio, at any given time, that he really let run higher unimpeded; which have made up for the inevitable losses occurred on other speculations.
*In full disclosure, the companies mentioned by Erik in this interview, Snowline Gold (SGD) (SNWGF) and Inflection Resources (AUCU) (AUCUF), are positions held in his personal portfolio, and also may be site sponsors of The Hedgeless Horseman website at the time of this recording.
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