Following up on yesterday’s video a reader commented that he has been in a lot of different holdings each with small weights but he feels that it could become too time demanding to follow a lot of holdings.

He did not quantify what a lot is. I have mentioned quite a few times that when fully invested I hold 40-45 names for the equity portion of the portfolio. I’m not sure that 45 is a lot but it is not a little.

How many holdings can you comfortably keep track of? Part of the answer depends on what you hold and what your idea of keeping track means. If a stock is a proxy for a country then in addition to knowing a little about the stock you also need to know a thing or two about what is going on in the country.

A reader left a comment on a recent post asking what sorts of problems Hungary has. Anyone thinking about Hungary, the easiest way in would probably be Magyar Telecom (MTA), of which I have no position and no plans to initiate a position, needs to be in touch with the deficits, the inflation that the central bank seems to be having a little trouble with and maybe that the rates there are quite high; that is probably a good starting point.

I don’t think that burden is excessive but not everyone will want to put in that sort of time. All I’m saying is know yourself and what kind of time you want to spend.

Could you cover 80% of it with half a dozen broadish-based ETFs and the other 20% with seven or eight narrower holdings? Maybe the narrower themes should only be 10% or maybe 30%?

Sticking with 20% for narrow ideas would it then be possible to decide you want exposure to water so then analyze one of the water ETFs and then also a few stocks like maybe Hyflux (HYFXF), Valmont (VMI) or Veolia (VE), as examples? If you decide you like Hyflux would learning a little about Singapore be a possibility time wise?

Then could you repeat this five or six more times? How about more than six? Or less?

A mix like this sounds easy in a way but I think it potentially adds a layer of analysis that should be done. Anyone thinking of going narrow in the manner described in this post with 20% or more needs to be very aware of how the “satellite” portion fits in with the “core” portion. Quite a few times I have mentioned that most emerging countries have a big bank, a big oil company and a big phone company (the other day a reader added big cement company to this). Putting 3-5% into the big oil company of a country might leave you very heavy in energy which might not be bad (generically speaking) but you should know that you are overweight.

At this conference I just got back from someone familiar with my blog mentioned how loyal the readers of this site are. He is right and I should take a moment here to say thanks. Blogging is a lot of fun, I know I learn from it and hopefully you do too. Thank you.

The picture is obviously the Hoover Dam. There is a lot more going on there than I realized from watching Austin Powers and Lost In America. To repeat from the other day, if you are in Las Vegas it is worth driving the 30 miles to see it.

Last 5 posts by Roger Nusbaum

• The Big Picture for the Week of November 15, 2009 - November 14th, 2009
• Process Drilldown - October 23rd, 2009
• Sunday Morning Coffee 10-18-09 - October 18th, 2009
• A Little Followup From This Morning - October 8th, 2009
• Wednesday Roundup - October 7th, 2009