Building a Concentrated High Conviction Portfolio

A rigorous guide to building and running a concentrated equity portfolio in Indian markets, built for experienced investors who have outgrown a 40-stock spread and want their best ideas to actually matter. Learn why diversification stops adding much beyond 15 to 20 stocks, what the Kelly criterion and its practical half-Kelly version say about position sizing, and the temperament and capital tests that decide whether concentration is right for you at all. Go deep on how conviction is actually built: writing a one-page thesis, identifying your variant perception versus the Nifty consensus, and setting kill criteria before you buy. Then construct the book itself: how many stocks, sizing by conviction tiers, spotting correlation traps where ten NSE stocks behave like three, and staggered versus lump-sum entry. Finish with the discipline that keeps a concentrated portfolio alive: quarterly thesis reviews, rules for trimming and adding, and the real tax and cost drag of churn under Indian LTCG and STCG rules.