ATM - A2 Milk Corporation Limited

[BlackPeter]

Interesting to debate Diversification.

Warren Buffett is quoted as saying, “Diversification is protection against ignorance - it makes little sense if you know what you are doing.”

In my case, from 2013 to present, ATM grew from 20% to over 60% of my portfolio and I was happy with that. Overall my total portfolio benefitted greatly from my not being too diversified (i.e. biased to ATM) While ATM has grown by over 1200% in that time, as a result my TOTAL portfolio has averaged 108% pa growth from 2013 to present, (i.e. non-taxable unrealized capital gain.)

I wonder if I would have achieved this result if I had stayed fully diversified with no stock counting for more than 10% of my portfolio?

Probably not. Diversification clearly has its price. It does however preserve your money if things go not as planned and hoped for. Look at it like an insurance policy.

If you insure your house and you get a fire or a big earthquake you probably feel pretty smug. If you don't insure your house and there is no fire or earthquake ... does this mean that you've been clever?

The only time you don't need diversification is if you know exactly how the share price will develop in the future - i.e. 20/20 foresight. Nobody I know is able to do that ... but maybe it works for you? I guess with ATM so far you've been lucky - but would you be happy as well if ATM would have developed like WYN or PEB or XRO? Nobody knew for sure whether the A2 story will fly - and to be honest ... nobody knows what's around the next corner.

Diversification is good.

[winner69]

Back on topic

Seeweed says 950 by AGM

Hey 10 bucks sounds better

[winner69]

Wonder if Jian Yang has any influence on how much we sell to China

[hardt]

Does all this euphoria worry any holders even in the slightest?

Half my portfolio rides on this one... it worries me a little. ( but then again, it has been worrying me since December )

[couta1]

Does all this euphoria worry any holders even in the slightest?

Half my portfolio rides on this one... it worries me a little. ( but then again, it has been worrying me since December )

It would worry me if I was still holding any of my original sized helpings, but then there's no way I would have held on this long anyway. However that's not because of not being diversified but rather my unease with this particular stock, other stocks like SPK/CNU/AIR or any of the energy companies, im quite happy to hold a 50% or more portion of my portfolio at any given time for dividend purposes.

[Beagle]

Okay just a few words on strategy. Its a classic case of horses for courses. When you're young in your 20's or 30's one can afford to take big risks on young fast growing companies because if it all goes wrong you can start again and have plenty of time to rebuild your portfolio.
In your 50's or 60's once you've already built a nice portfolio it doesn't make any common sense to go risking too much on any one stock because for one thing hopefully by then one doesn't need to take untoward risks to achieve their investment goals and secondly if it goes wrong there's not much time left to rebuild. No one investment strategy is the "right fit" for all, just what suits each individual based on their age, risk tolerance and investment objectives.
I'm watching the technical's with this one. If it breaks down through the 30 day MA at some point in the future i'll probably sell half and if it continues down to breech the 100 day MA I'd sell the rest. Until then the trend is your friend until the bend in the end I have a modest position as part of a well diversified portfolio so no worries, just enjoying the growth

[winner69]

Does all this euphoria worry any holders even in the slightest?

Half my portfolio rides on this one... it worries me a little. ( but then again, it has been worrying me since December )

"When investors are euphoric, they are incapable of recognizing euphoria itself"

No worries

Ten bucks here we come

[Leftfield]

Good points thanks posters. Beagle's points about diversification and stages of investment are valid. I recall Buffet was not v diversified in his early stages (big punts on Berkshire, Insurance and Coca-Cola etc) While now Buffet has so much cash to invest, he has to diversify to find homes for all the cash.

Something for me to aim for!

That said, as ATM SP gets higher, the chances of it doubling again in 12 months get less likely (but you never know,) while other stocks such as PPH, THL, XRO and even humble BLT have good chances of doubling in the next 12 months.

So some diversification helps us find the next ATM!

[suse]

That said, as ATM SP gets higher, the chances of it doubling again in 12 months get less likely (but you never know,) while other stocks such as PPH, THL, XRO and even humble BLT have good chances of doubling in the next 12 months.

Do you really think XRO could double??? It's running at $32odd at the mo!

I wish BLT would do something... its just stalled and I had high hopes for them. Must be an announcement due soon.

As for ATM, I finally got on the bus but I wish I had bought a few more tickets... I'm very undiversified in that I have a truckload tied up in HBL but maybe I should release some and get more ATM given they have talked about a special dividend?

[Beagle]

Not to forget about the share buy-back which they haven't even started yet either.