In investment portfolio, I think we need to have a combination of long term bet, arbitrage bet, company or industry revaluation bet, undervalue with huge upside potential bet, etc. Basically long term bet is hard to come by as well known company's valuation is usually already very expensive and hard to call it fair, and potentially good long term bet is hard to identify in our naked eyes.
To identify potential long term bet, i think 1 of the way is to start with arbitrage bet, undervalue company bet, good company in downturn industry bet, solid foundation company that kept on downgraded by analyst or investor bet, small medium growth company bet that investor have doubt with its growth sustainability. Of course the company has to be financially sustainable and have good management in place. As time goes by, those bets might eventually become our long term bet if things turn out favourably. If it turn out bad, just sell it as we know it is just a bet. As we keep on our betting practise, our skill of betting improve overtime.
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