Investor Quote of the Week

Quote Meaning

Diversification is good up to a certain point.

If you diversify too much, you might as well invest in the S&P 500 index.

If you do too little, you can burn your portfolio to the ground.

Professional investors meet somewhere in the middle.

There should be a balance between dampening potential returns and allowing stock-specific events to heavily impact returns.

Nugget of Wisdom

Selling can be hard.

Investors sell in the following scenarios:

1. The company is overvalued

2. You need money for other things (e.g., buying a house)

3. The stock has gone up and now makes up a big chunk of your portfolio (e.g., rebalancing)

4. The company is in hot water and might not recover financially

5. There are better opportunities for your limited investment capital

These are the main reasons investors seek to sell a stock.

Usually, "1", "4", and "5" are the hard parts.

How do you know when a company is “overvalued?”

How do you know with certainty whether or not a stock is bound for a recovery if the company improves?

How do you classify a “better investment opportunity"? Will the potential returns be higher elsewhere?

These are hard questions. Nobody has a crystal ball.

There is also no right or wrong answer.

That is why investing is both an art and a science.

This is why reading annual reports, doing due diligence, and understanding what you’re investing in are so important.

Only you can come up with the game plan.

Mistakes to Avoid

Stop listening to your friends!

Talking heads are everywhere.

Friends chatting about stocks at parties...

A co-worker discusses his investments during a coffee break.

A rule of thumb?

Unless they have a successful track record of investing:

Do not listen to them.

Form your own opinions.

Your investment style differs from that of friends and others.

Never act on “hot” tips from anyone, and don’t fall for “FOMO"—fear of missing out.

There will always be another opportunity.

Stock of the Week

KKR & Co. (Ticker: KKR)

Company Description

KKR & Co., Inc. operates as an investment firm. It offers alternative asset management as well as capital markets and insurance solutions. The firm's business segments include Asset Management and Insurance Business.

The Asset Management segment engages in providing private equity, real assets, credit and liquid strategies, capital markets, and principal activities.

The Insurance Business segment offers retirement, life insurance and reinsurance solutions to clients across individual and institutional markets.

The company was founded by Henry Kravis, George R. Roberts, and Jerome Kholberg on May 1, 1976 and is headquartered in New York, NY.

Growth Metrics

Revenue growth 5-year average (year-on-year): 24%

EBIT growth 5-year average (year-on-year): 25%

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Talk soon,

Sam