Most derivatives traders I know in the industry do some version of buy-and-hold for their personal portfolios, but one of the best I know does something completely different. He sticks to a philosophy of scanning multiple "small" cap companies(<50-100mm mktcap) until he finds one he generally likes, then figures out absolutely everything he can about them. Every piece of information available, down to calling whoever he can in management. Then once he decides he likes it, he commits 20-30% of his portfolio into them, often becoming a small, but notable investor in the company itself.He's made massive amounts of money from this. He admits that it's basically a second job in terms of time and effort spent, but believes that it's replicable because no institutional investor is actually looking at these stocks, leading to hypothetical mispricings.
No comments yet.