Successful emerging technology investing is all about stock picking; you must choose stocks that possess the right technology and a competitive advantage early in their life cycle.
You cannot get it right every time and need to monitor progress, but when the opportunity arises to add to a winning position, I like to take it. Sometimes it involves moving money from a loser, other times it involves redistributing profits, but either way, it puts more money into winning trades and lets them run.
The Nuclear market is a technology I track, expected to see near exponential growth in the coming years. It is a key emerging technology on multiple fronts, from enrichment of fuel, Small Modular Reactors, and advancing nuclear medicine.
I want to ensure I have exposure to all segments of this market and build positions where possible. A crucial part of the plan is to compound our returns by increasing winning trades when opportunities arise, and the companies we are investing in are still under the radar of most investors.
When they go mainstream, it is often too late; the hype cycle can take hold of the stock, and its price starts to deviate from its fundamentals; however, buying early in a company's commercialization presents an additional set of risks.
It is necessary to control position size and limit overall exposure. I will increase my exposure to this company from 3% of my portfolio to 4%, taking an additional position that is half the size of my current holding.
The position is currently up 22% from when I first invested in May.
Disclaimer: I'm not a financial advisor and don't offer investment advice. This newsletter covers my high-risk trading in small-cap emerging stocks; past performance doesn't guarantee future returns. Make independent investment decisions based on your own research and risk tolerance; you are solely responsible for outcomes.