Guy Spier: Defy your Urge to Rebalance

In this interview, Guy Spier explains that in a randomly selected portfolio held over a long period, most returns come from a few big winners, while many stocks do little or lose value.

He emphasizes the challenge of intervening in a portfolio, as transaction costs and the unpredictability of outcomes often make adjustments counterproductive. Guy stresses the importance of having overwhelming evidence before making changes, noting that Berkshire Hathaway’s success similarly relies on a few key companies.

The principle, if I just pause and self-reflect, is simple to talk about and demonstrate, but it’s far more difficult to act in a way that avoids rebalancing the portfolio. It can be painful.

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The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

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