What?!
bl-5.
Some kind of code word?
No. More like a nightmare recap.
Say it again.
b for bravo. l for Lima. minus. 5.
What is it then?
A horror list.
One’s worst performers.
Why have it?
You pull out this list upon expenditure that crops up. Any kind of expenditure.
And then?
See if anything high-conviction shows up in bl-5.
Yes?
Disregard for now.
Look for anything low-conviction. Discard to the tune of expenditure.
Don’t you use income against expenditure?
That’s the whole thing. Income needs to go into something currently high-conviction.
Fresh purchase?
Yeah.
Why?
Good money needs to chase good things.
Worst performer money with an issue needs to take care of outgoings. This way the folio cleans up. Gets weeded. On auto.
Well, let me tell you, no one is going to do it like that. So inconvenient. Like using a leg to scratch a head.
True.
Winners do things differently.
A few people win in the market.
Very, very few win big.
To win big, almost everything we do needs to be…?
Done differently.
Correct.
Like bl-5 implementation.
Bitter pill, but if you say so.
I insist.
At least tell me what bl stands for.
Well, one’s portfolio – listed – in ascending order of performance. Cut off list after the 5 worst performers. Pinpointed info. Nothing more pulled if not required. bl is just a command I use on AI to initiate the pull. You can name the list whatever you want.
Can you finally please tell me what the bl stands for, for you?
Sure. Invert the list. bl5 command prints the five best performers. That’s my ‘buying(b) list(l) 5(best performers, no minus here)’.
My spare funds go into these.
Into the same ones again and again?
No. As you keep buying something, its buying average lowers. Let’s say, upon adequate lowering, it goes into 6th position. Now it’s not ‘outputted’ in bl5. It doesn’t get funds. What it does get is time to perform once again, on repeat, like it’s been doing, but this time on a bigger buying base. Would then mean more burgeoning for the folio.
You’re not even looking at valuations, just pumping in the funds into bl5ers?
They have the maximum runway, don’t they?
Runway?
Slots between them and bl-5. Maximum. Meaning maximum time to keep performing like they have been doing. Resulting in more and more burgeoning off a bigger and bigger base…
What if something misses?
Let it.
Might erode 50%.
Let it.
Expunge?
Only if it’s reached bl-5 and conviction’s flipped to low, and the other candidates in bl-5 are high-conviction.
So, it gets time to get its groove back and prove itself again before being bought more.
Exactly.
What if a bl5er keeps downgrading, reaches bl-5, and your bl-5 is full of high-conviction stocks?
Like the core IT world just now?
Yeah.
Well, the least-conviction one needs to be discarded then, to the tune of the expenditure.
Would it pain you?
Yes.
Why do it then?
Confronting the pain for a more lucrative tomorrow is a winning mental condition.
We can always buy the laggard back later.
When it starts performing, you mean?
Yes.
What a loss for you then.
No. Wrong thinking. Loser thinking. Imagine IT starts churning out mega results. One enters. Core IT lands in bl5. One loads up. 2 to 5 baggers in a year or two? How do the mathematics look now.
So that’s how a winner would think?
Try it out.
The most difficult thing to put into practice.
Precisely why so few win big.
Where’s this heading?
In 25 years, you’re sitting on many multibaggers with very large buying bases.
