Portfolio Management — Atlas Asset Management

15–25

target number of positions

10%

hard cost-basis cap per position

20%

market-value ceiling before trim

10%

permanent dry powder floor

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Looking for the position sizer?

The conviction-based position sizer has its own page in Tools. Open the interactive model on Conviction Sizing.

Position lifecycle rules

Initial tranche — first buy⅓ of target size

Tranches 2 + 3 — build on deeper discountOver 4–8 weeks

Max entry size (cost basis)10% — hard cap

Growth tolerance before trimming15–20% market value

Thesis review trigger−20% from avg cost

Aggressive add zone (thesis intact)−40% from avg cost

Sell trigger — primaryThesis broken or IV reached

Liquidity constraint≤ 5–10× avg daily volume

Exit horizon if forcedMax 10–14 trading days

"If an undervalued stock falls while fundamentals remain unchanged, we should relish the opportunity to buy more on sale."

— Seth A. Klarman, Baupost Group

Conviction tiers

High conviction cap 12–15% cost

All three criteria: moat ✓ + founder-led ✓ + 40%+ discount ✓. Reach full size earlier on the curve. Add aggressively on pullbacks. This is the core of the portfolio.

Medium conviction cap 8–10% cost

Two of three criteria met. Standard discount curve. Three tranches over 4–8 weeks. Core workhorse positions.

Low / opportunistic cap 5–7% cost

One criterion or early-stage thesis. Starter only. Do not average down aggressively. Must grow to medium conviction to build.

Moonshot / event-driven cap 4–6% cost

Binary outcome. Barbell logic — small but real. Catalyst must be clearly identified. Never average down. Sized knowing total loss is possible.

Hard concentration limits

Single position — cost basis10%

Single position — market value ceiling20%

Top 5 positions combined45%

Single GICS sector20%

Single investment theme25%

Single country / region30%

Single currency exposure25%

Diversification by theme and region,
not by historical correlation.
In crises everything correlates anyway.
Prefer different stories, not different tickers.

Cash management strategy

10%

Permanent floor — never deployed

interest-bearing CZ deposit ~3.8% p.a.

10–20%

Normal markets — dry powder

Signal: Buffett indicator at fair range

20–25%

Rich valuations — maximum reserve

Deploy aggressively on corrections

Cash vehicleCZ deposit ~3.8%

Cash sizing signalMkt cap / GDP (Buffett)

Deploy triggerMarket corrections / dislocations

Rebalancing triggerFundamental, never calendar

More cash in high-valuation environments.
Discipline = doing nothing when nothing is cheap.
Opportunity fund ≠ lazy cash.

Sell discipline

✕

Thesis is broken

Exit immediately — no exceptions

✕

Management integrity failure

Exit immediately — no exceptions

✕

Accounting red flags appear

Exit before full confirmation

~

Intrinsic value fully reached

Trim to target weight

~

Better opportunity available

Rotate — but be very certain

~

Position exceeds 20% market value

Partial trim back to ceiling

+

Price −20–40%, fundamentals intact

Hold / add — this is the signal

+

Market panic, thesis confirmed

Deploy dry powder aggressively

Review triggers & cadence

Earnings releasesRevalidate thesis within 48h

Price −20% from avg costIndependent thesis review

Monthly portfolio checkConcentration + position ranking

Watchlist force-rankQuarterly — best vs deployed

Rebalancing triggerFundamental, never calendar

Semi-annual strategy reviewRisk limits + mandate check

"Beware of investment activity that produces applause; the great moves are usually greeted by yawns."

— Warren Buffett, Berkshire Hathaway Letter

Leading indicators to monitor

PMI inflections50 crossing → sector rotation signal

Inventory destocking cyclesEnd of cycle → restock demand coming

Pricing inflectionsLeading indicator for margin expansion

Insider buying clustersMultiple buyers + open window = strong signal

13F filings (smart money)Confirm thesis, find new ideas

Supply chain signalsLead times, order books, channel checks

Buffett Indicator (Mkt/GDP)Cash sizing signal

ScuttlebuttCustomers, ex-employees, job listings, reviews