Microsoft fell 23% in a year, but buying the dip requires discipline. The speaker outlines a portfolio process: stocks must meet criteria for value, growth, and cash flow before purchase, then held long-term. Diversify across 20-40 holdings at roughly 5% each, not just the Mag 7.
Microsoft down 23% in a year. Does that surprise me? It does. Did I expect it? No. Where's the buy the dip time for Microsoft? Now, first of all, how do I know Microsoft isn't— I don't know, there's some fraud going on and it's just a rubbish company. Well, we've got no evidence of that, and in the past it's dropped this much before. Okay, so how do we know it's a company worth holding and potentially buying the dip? Because we're not trading. So to be in our portfolio, it would first have had to have met all of these factors anyway, which it did. We don't just— because At the entry point, if it meets those, we then hold it. We don't think, oh, next month it's slightly below on one, let's trade in and out. That's a different thing. That's trading. Okay. Let's take a Microsoft because fine. The reason you don't just put all your money in one stock like a Microsoft or an Oracle or a Meta is because this might happen. Now, for all those people who've said, oh, the Mag 7 is the only thing moving the markets up. What bullshit. You can tell retail clients don't actually look at the data because in the Mag 7 is Microsoft and Meta. Sorry, they're not the ones pushing the markets higher. They're in the Mag 7. 7, and they're both down nearly 20%. Well, on average, 20% between the both of them. So, and outside of the Mag 7, hang on, Morgan Stanley's up 68%. My Goldman Sachs is up nearly 70%. I've made double the money in Goldman Sachs in the last 12 months than I did in Nvidia. Did I know that? No. That's why I don't have one stock and why Warren Buffett doesn't have one stock. How did Goldman Sachs get in my portfolio? Value, growth, income, cash flow, sortino. We give our clients this data Goldman Sachs ticked all the boxes, so we bought it. But Alpesh B Patel OBE, it's not tech, it's not AI. Why did you— how dare you buy something which isn't just tech? Why would I just have concentration? You should have just concentrated on your AMD holding, and you would have been up 300%. Yes, but we didn't know how much something would go up. Do you see what I'm saying? We have very little knowledge for certainty. We don't know how much something's going to go up. That's why we don't put all our money in one stock. We don't know Therefore, if something might fall, that's why we don't put all our money in one stock. If we knew those things, and anybody who tells you any different and says to you, we got this company and you should buy this stock, they should be banned. They should be shot. Because if they're saying that, why don't they put all their money in just that one company? That's because they're lying. They don't know. And when you don't know, just like Warren Buffett or myself, we have, say, 20 securities, 5% in each, or you can do 2.5% in 40, okay? And then keep cash, 2 years' worth of expenses. If you're more risk-averse, 30% of your assets in cash, or 40 or 50, depending on our risk aversion, our simple job done.
