One of the most common questions I get is about position sizing.

Not “what stock should I buy,” but how much of a portfolio a stock deserves.

That question matters more than most people realize. You can pick great companies and still underperform if your sizing is wrong. On the flip side, a well-sized position in the right business can do more for long-term returns than constantly chasing new ideas.

This is how I think about what earns a 10%+ position.

Every large position starts with conviction, but conviction alone isn’t enough.

High conviction without understanding risk is just confidence.
High conviction with risk awareness is strategy.

Before I size anything aggressively, I ask myself:

• Do I deeply understand how this business makes money?
• Can I explain the bull and bear case clearly?
• Do I know what would make me wrong?

If I can’t answer those simply, the position stays small.

A 10%+ position is not about excitement or upside potential alone. It’s about confidence across multiple scenarios, including the uncomfortable ones.

Conviction builds when several things align, not just one.

Here are the biggest factors that push me toward larger sizing:

1. A Large, Durable Market
I want companies operating in markets that aren’t dependent on perfect conditions. Big markets give businesses room to grow even if execution isn’t flawless.

2. A Clear Path to Profitability or Cash Flow
Early growth is great, but I want to see how that growth eventually turns into real economic value. The clearer that path is, the easier it is to size up.

3. Management Incentives That Make Sense
I pay attention to whether leadership is aligned with long-term shareholders. This doesn’t mean perfection, but I want incentives that reward building a real business, not just pumping short-term metrics.

4. Improving Fundamentals
Revenue trends, margins, unit economics, and balance sheet health matter more to me than short-term stock price movement.

When multiple boxes are checked at the same time, conviction compounds.

Concentration helps when:

• You’ve done the work
• You understand the risks
• You believe the market is mispricing the business
• The company has a long runway

In these cases, spreading capital too thin can actually hurt results. If your best ideas are truly differentiated, they shouldmatter more in your portfolio.

I’d rather have fewer positions I understand deeply than many positions I barely follow.

That doesn’t mean ignoring risk. It means being intentional.

Concentration becomes dangerous when:

• The thesis relies on a single event
• The company depends heavily on external factors it can’t control
• The balance sheet is fragile
• You’re emotionally attached to the stock

If one earnings report, regulation change, or macro shift can break the thesis overnight, that’s not a 10% position for me.

High volatility alone doesn’t disqualify a stock. Fragility does.

Here’s how I mentally categorize ideas:

Core Compounders
These are businesses I believe can grow steadily over many years with improving economics. These are the onlycandidates for 10%+ positions.

High-Upside Growth Plays
Massive upside, but higher uncertainty. These usually stay smaller, even if I’m bullish.

Opportunistic or Tactical Ideas
Great setups, but limited visibility long term. These never get oversized.

A stock can move between categories over time. As fundamentals improve and uncertainty drops, position sizing can increase. Sizing is dynamic, not static.

Most investors think position sizing is about being aggressive.

It’s not.

It’s about being honest.

Honest about what you know.
Honest about what you don’t.
Honest about how you’ll react when things get uncomfortable.

If you can’t sleep holding it, it’s too big.

A 10%+ position is earned, not forced.

It comes from patience, repetition, and understanding—not hype or short-term price action. Over time, learning how to size positions properly has mattered more to my results than finding new stocks.

Good investing isn’t about always being right.
It’s about being sized correctly when you are.

I use Surmount to help filter and organize ideas before I ever think about position sizing.

Surmount helps me:
• Screen for businesses with durable fundamentals
• Compare growth, valuation, and balance sheet strength
• Eliminate weak ideas early so I can focus on the best ones

Position sizing only comes after the fundamentals pass my filters. Surmount makes that process faster and more disciplined.

This article is for educational and informational purposes only and reflects my personal investing framework. It is not financial advice, a recommendation to buy or sell any security, or a guarantee of future results. All investing involves risk, including the potential loss of capital. Always do your own research and consider your financial situation and risk tolerance before making investment decisions.