Re: [RT] GEN: STOCK DIVERSIFICATION--THE 3% SOLUTION

["charles meyer" <chmeyer@xxxxxxxx>]

Hinton-

Thanks.  That's might be the genesis of this concept.

chas

----- Original Message -----
From: Hinton Clabaugh <clabaugh@xxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, July 20, 2002 9:38 PM
Subject: Re: [RT] GEN: STOCK DIVERSIFICATION--THE 3% SOLUTION


> I remember modern portfolio theory used to teach that 10 stocks from
> different industry groups is sufficient for to diversify unique risk and
get
> market returns, and that even 7-8 stocks would suffice. That was 20 years
> ago, perhaps someone who is current on academic finance and could comment.
>
>
> ----- Original Message -----
> From: "profitok" <profitok@xxxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Cc: <gannsghost@xxxxxxxxxxxxxxx>; "Vincent DONOVAN"
> <vdonovan@xxxxxxxxxxxxx>; "Don Thompson" <detomps@xxxxxxxxxxx>; "Dorothy
> Carter" <dorothy.carter@xxxxxxxx>
> Sent: Saturday, July 20, 2002 8:37 PM
> Subject: Re: [RT] GEN: STOCK DIVERSIFICATION--THE 3% SOLUTION
>
>
> > I would NEVER  do that
> > Between sep 15 and October 7 be fully invested
> > 33% qqq
> > 33%  spy
> > and 33%   mdy
> > this 3 alone will give you a total of  1000 shares diversification
> > Ben
> > ----- Original Message -----
> > From: "charles meyer" <chmeyer@xxxxxxxx>
> > To: "REAL TRADERS" <realtraders@xxxxxxxxxxxxxxx>
> > Sent: Saturday, July 20, 2002 7:25 PM
> > Subject: [RT] GEN: STOCK DIVERSIFICATION--THE 3% SOLUTION
> >
> >
> > > Group-
> > >
> > > I've heard from a couple of sources that the optimal method of
> > > diversification
> > > in a stock portfolio is to have no more than 3% in any single issue.
To
> > be
> > > fully invested would there require owning a total of 33 individual
> stocks.
> > > Of
> > > course the reason cited is that anything can hapen in the way of
> earnings
> > > surprises to individual issues; but with a total of 33; any price
shocks
> > > will
> > > not adversely affect the total portfolio performance.
> > >
> > > I'm wondering if there is any type of statistical data; or concept; to
> > back
> > > up
> > > the idea of how the number 33 was arrived at.
> > >
> > > Thanks for any comments.
> > >
> > > chas
> > >
> > >
> > >
> > >
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