Portfolio structure

My portfolio is deliberately designed to suit my strengths and weaknesses:

I am good at not interrupting compounding in great companies that I know well, and I want to concentrate my capital in a few of these.
I am also good at adding to stocks I know well when the market offers a real opportunity, and I am getting better at reducing them when there are better opportunities elsewhere, but…
…unfortunately I am not good at following stocks I don’t own.

My portfolio is therefore concentrated with a long tail. The allocations aren’t fixed, but probably won’t change a huge amount over time:

~40% of my portfolio is in capital allocators. I regard these as permanent holdings unless they become obviously overvalued. The core appeal of these firms is their culture, which combined with permanent capital results in great decision-making and exceptional long term track records. Collectively, these companies hunt for exceptional opportunities to deploy my capital across a vast range of potential investments. They all have some structural investing advantage over me - a cash generative core business, the ability to invest float, the ability to access investments that I can’t, or the ability to secure long term low rate debt against equity portfolios. These advantages come at the cost of a fee or a salary for the managers, which I am happy to pay. These holdings are currently Fairfax Financial, Brookfield Corporation, and Pershing Square Holdings. I have owned these for an average of 15 years.
~40% of my portfolio is in what I call “trades”. These are stocks I think have a high probability of doubling in 5 years with a low probability of significant loss. Trades get promoted out of the tracker basket when a real opportunity presents itself, and demoted again when the opportunity is gone. Each trade is 1.5% or greater in size.
~5% of my portfolio is in a basket of trackers. Individually each position is tiny. Collectively they form a basket of wonderful and/or cheap businesses that should compound well over time, but the real value of these holdings is in their volatility: when a real opportunity presents itself, I can move fast with confidence based on years of accumulated knowledge. Most of my time is spent on curating and monitoring this basket. Trackers are 0.1-0.5% in size.
The remainder of my portfolio is in private investments and cash.

Disclaimer

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