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- Aug 2024
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www.grahamanddoddsville.net www.grahamanddoddsville.net
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All that depends on the reward-to-risk ratios that you arelooking for. Our favourite ratio is 5 to 1 — in other words,$5 of upside for every $1 of risk. Over the past 35 years, wehave found that when you have a basket of 30 to 40 stockswith 5 to 1 odds in your favour, you’re going to have a verygood performance over the long run. On the larger, blue chipstocks, in most cases the best you can typically get are 2.5 or3 to 1 odds. This recent bear market has been an exception,but most of the time this is the case. But on those smaller tomid-size companies, you really want to hold out for those 5to 1 odds and in some cases, if you’re patient, you can geteven more
Arnold Van Den Berg
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