Hi Daniel, I normally start with a smaller 2-2.5% position. If the thesis works out as expected or some price dip occurs in the next months/quarters, I will add up to 5%. If I'm very convinced, I may increase up to 7.5%. All on cost basis.
I also think that the original Kelly Criterion suggested position is too aggressive and I would apply some sort of discount. So if it recommends a 60%, my max position will be 20%.
Thanks for your sharing. Do you equally split your positions or would you adjust the position based on the odds?
Hi Daniel, I normally start with a smaller 2-2.5% position. If the thesis works out as expected or some price dip occurs in the next months/quarters, I will add up to 5%. If I'm very convinced, I may increase up to 7.5%. All on cost basis.
Thanks Maksim. Very helpful! I’m currently using Kelly Criterion to help decide the position sizing.
Hi Daniel, I saw it mentioned in Pabrai's book. But I feel like it's a bit too aggressive, or?
I also think that the original Kelly Criterion suggested position is too aggressive and I would apply some sort of discount. So if it recommends a 60%, my max position will be 20%.
I see, but still probably a bit too much for my taste.