Time for an update on my Fantasy Fund at
https://www.stockopedia.com/fantasy-funds/magic-hat-463/

Dart (LON:DTG) was due to be kicked out of the portfolio by rotation. Although it doesn't qualify for the Greenblatt Screen, it still qualifies for the Screen of Screens, and has a StockRank of 96. So it still looks pretty good to me, and I'm too lazy to pick something else.

Dart (LON:DTG) is nearly 24% of the portfolio, bumping into the 25% limit that Stockopedia expects. It is up a whopping 515% since it was added into the portfolio. The fund has done well. Although I haven't done the maths, it could be that this single pick has really boosted it from a more mediocre result. So it's entirely possible to consider that the portfolio's outperformance was due to luck than superior strategy.

Reducing the holding should eliminate some risk from the portfolio; as well as potentially curtailing returns. I think it's important to maintain some humility, though. No matter how much you know, or think you know, you can always be wrong. I am not Warren Buffett. "Putting all your eggs in one basket and watching the basket" is a dangerous approach.

Dart has had a cracking return since August of this year. It is technically overbought, with a 14-day RSI above 70. Technical indicators can be problematical, because, of course, overbought shares could easily go on to do much better, whereas the underbought ones could yet dive off a cliff.

Dart ought to be due for a little bit of a rest.

In the end, I decided to reduce the portfolio's exposure by a half, giving it some capital in which to pour into the smaller positions. Time to pull up the flowers and water the weeds, as the saying goes.

I actually bailed out of Dart in my personal holdings some time ago, much to my regret. My best-performing share is Diploma (LON:DPLM), which I bought in Dec 2015. I had owned it previously, but sold because it was "too expensive." That turned out to be a not-so-great idea. It's proven to be a really good company. At a PE of 25, it's on a racy valuation, though. I want to…

Finish reading with a 14 day trial

or Unlock with your email

Already have an account?
Login here