As you move out of nano-caps, how will you separate the benefit of better liquidity from losing the valuation discounts that made those names interesting? Access to management may improve, but I'd be curious whether your required return changes with the opportunity set.
It has nothing to do with what I prefer, brother. This is just a product of having more capital to deploy.
If I try to buy $10k worth of a stock that has a $10k average daily volume, it should take me about 5 days to get filled without moving the price. If I scale up and try to buy $100k worth of that same stock with the same volume, it will take me 50 days.
The risk of waiting 50 days is just too large and really messes with my ability to compound.
Got it, I was framing it as a choice when it's really a capacity limit. Fifty days to build a position changes the economics before you even get to the valuation.
As you move out of nano-caps, how will you separate the benefit of better liquidity from losing the valuation discounts that made those names interesting? Access to management may improve, but I'd be curious whether your required return changes with the opportunity set.
It has nothing to do with what I prefer, brother. This is just a product of having more capital to deploy.
If I try to buy $10k worth of a stock that has a $10k average daily volume, it should take me about 5 days to get filled without moving the price. If I scale up and try to buy $100k worth of that same stock with the same volume, it will take me 50 days.
The risk of waiting 50 days is just too large and really messes with my ability to compound.
Got it, I was framing it as a choice when it's really a capacity limit. Fifty days to build a position changes the economics before you even get to the valuation.