In 2022, I did a major overhaul of my methodology of picking individual cos. I look for a very different set of things than I used to before. I'm also very thoughtful of what has the right to enter my portfolio. I believe these changes position me better for long-term success.

Looking in hindsight to my old way of approaching individual companies, it was pretty random and inconsistent.

It's safe to say I'm very picky now and conservative as opposed to what I used to be like.

I'd say writing down a set of KPIs or traits if you will for the companies who are allowed to enter your portfolio is very important, maybe even necessary for you to succeed. This should avoid you making exceptions for certain holdings based on your emotional association with co.

If those break, you should either reduce your exposure or sell out of them.

So for me for example, I'm looking for:

✅ Culture (Glassdoor is a tremendous resource)
✅ Healthy balance sheet
✅ Cash flows
✅ Durable growth
✅ Management I trust, ideally with great previous track record
✅ History of great capital allocation
✅ Optionality

If I see any particular holding in my portfolio going downwards when it comes to these parameters, I tend to look deeper into what's going on, understand my thesis again and ask myself whether I can see a better opportunity elsewhere.

If so, I look at other holdings inside my portfolio and ways of consolidating into them while maintaining a similar degree of exposure to certain tailwinds, or I'm open to initiating new holding from either my Watchlists or list of companies that are solid but I don't own them.

This is basically a simplified version of a process I go through whenever I'm making changes to my portfolio. Hope it helps for those who either are trying to understand my thought process or are interested in my decision making.
Joey Hirendernath's avatar
Great post Sam. Also wanted to say it's awesome to see you take top 2 at the the leaderboard for this month :)
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Samuel Meciar's avatar
@joeyhirendernath Oh wow! Thanks for your support Joey :)
Rihard Jarc's avatar
Curious what is your biggest position right now?
Samuel Meciar's avatar
@rihardjarc Microsoft, as listed on my profile.