4 Growth portfolios
This chapter covers
- What is an investment thesis to predict growth companies?
- How do you create a portfolio that reflects an investment thesis?
- How do you find specific assets that reflect your thesis for your portfolio?
- How do you decide to take the required risks to pursue potential gains?
This chapter explores building an asset portfolio aimed at beating the market. For many investors, finding these winners, or alphas as many call them, is the holy grail of investing. A stock picker who consistently is slightly more right than wrong would have gained Midas’ touch.
Many investors differentiate between gambling and investing when individuals approach decisions to trade assets. We might be excited about possible investment ideas that will make us rich. And as these dreams of joining the club of Elon Musk and Warren Buffett might be overly pleasant, we tend to downplay doubts that endanger this endearing feeling of getting rich to come true soon. Gambling starts when we make our investment decisions on feelings, on the advice of one person, or just going with the flow and picking the popular stock. With only a tiny amount of research, we find potentially good investments. The tricky thing is to do the required research to find those investments that really pay off.