Hi all,

Bit of a long post that's probably more of a thought experiment than something I would actually execute, unless some of you can convince me it's a great idea! :D

Apologies of this is just a rerun of a post someone else has done in the past, feel free to link that and we can revisit that one. :)

Essentially I don't understand how a strict rule portfolio would work in the real world of a small PI and also I have recognised issues with how I pick stocks, though they're nothing new and probably just restating things that have been written about 100,000 times before.

Summary of the issue:

The waffle section goes into a lot more detail on the thought process but, I don't really have clear rules on what shares to buy, position sizes or have a plan with how or when to dispose of them. Position sizing is usually just "how much cash do I have right now". My biases are killing my ability to pick successful stocks or maybe my confirmation biases are playing havoc with my ability to recall what shares I looked at and why I rejected them. Probably both.

Then I remembered the NAPS portfolio and I remembered others use heavily rule based processes (SIF and Magic Hat come to mind though I don't recall right now what their criteria are), maybe there's something I can leverage in a similar way….

The Plan:

Well, potential plan, I'm looking to start a discussion and see what others think of it as an idea.

So my shares are generally small cap, have high QM. I can screen for that. I'm not very bright, but the fine folks at Stockopedia are, so rather than try to come up with KPIs for my screen based on all kinds of numbers I don't really understand fully, I would leverage my subscription and their brains and use the StockRanks. Screen for market cap above £50m below £700m, Q, M, QM and G all above 80.

Easy peasy.


But wait IGPJ - there's already out of the box screens that do something similar - yes there is but they don't fit the plan and I shall explain why.

So, you have to remember I only have a reasonably small pot, I can't commit to much more than £20k (well I could but…

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