A big thanks to Jim for explaining his LargeCapCash methodology and to AdrianC for explaining the mechanics in greater detail.

Some questions for Jim. I apologize in advance if these questions were previously answered or if the answers were implicit in the original methodology description:

Suppose one has taken initial positions in the forty (40) companies with each position representing 2.5% of the LargeCapCash portfolio. A second assumption is the LargeCapCash portfolio is reconfigured annually.

It is now the beginning of the second year and time to reconfigure the portfolio in accordance to the LargeCapCash rule set.

Situation A:
One (1) company now represents 10% of the portfolio's value. Five (5) other companies each represent 5% of the portfolio. These six (6) companies represent 40% of the portfolio at the end of Year 1. These six (6) companies again meet the LargeCapCash criteria for inclusion in the portfolio's Year 2. Has does LargeCapCash handle this situation in Year 2? Does it sell them back down to 2.5% of the portfolio? This obviously provides cash for buying new companies meeting the LargeCapCash criteria in Year 2. Is this the annual process of rebalancing the portfolio?

Situation B:
Three (3) companies have lost 50% of their original value during the first year, yet again meet the LargeCapCash criteria in Year 2. We assume the method calls for buying more stock to bring those three (3) positions up to each representing 2.5% of the portfolio. Is this assumption correct?


Jim and others, please tell us your thoughts on managing the LargeCapCash portfolio when a few positions have good fortune and run away from the pack.

An additional note:
In pulling together the forty (40) stocks meeting the LargeCapCash criteria, it was interesting seeing several having met previous screens and thus have been previously studied. It would seem managing money in the LargeCapCash portfolio over time may also provide deeper knowledge of many of these companies to where one could put money outside the LargeCapCash portfolio into the better companies when they experience a market swoon. To know them is to love them kind of opportunistic approach. . . . . . .

Thanks in advance for this help,
Uwharrie

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