Samir Arora vs Sandip Sabharwal: Protect capital or chase profits?

Investing philosophies can differ and that can be reflected in portfolio allocations

Investing is a lot about perspective. You can grieve the profits you didn’t make or celebrate the losses you didn’t take.

A recent exchange on Twitter was a good reminder.

Sandip Sabharwal, investment advisor and research analyst, and former head of equity at SBI MF tweeted about the importance of allocations.

He pointed out how lower allocations can limit the returns a person can make.

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Sabharwal's post, with many line breaks, possibly for emphasis, read: “In investing it's not only about

What you Buy

But

How much you Buy as a percentage of your portfolio.”

He added, “If you Buy just 1% of a potential winner then even if it doubles you make only 1%

Allocations are most important”.

To this, founder and fund manager of Helios Capital, Samir Arora responded with his characteristic wit.

He used nearly the same wording—except in the last line. Arora’s emphasis seemed to be on how small allocation can also limit losses.

Arora tweeted: “In investing it's not only about

What you Buy

But

How much you Buy as a percentage of your portfolio.”

He added, “If you Buy 1% of a potential loser (by mistake) then even if it halves you only lose 0.5%

Allocations are most important.”

Arora had tweeted about protecting from losses as the primary task to make profits, back in August 2022.

He had shared a story on Softbank Group’s founder Masayoshi Son, which chronicled Son’s shame of focussing on profits after the group saw a loss of $23 billion.

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Then Arora had tweeted a lesson for the day.

His tweet read: “Today’s lesson: They had this loss because he was focused on profits. To make a profit, focus on potential loss and try to eliminate it/ control it. Rest will take care of itself.”

To this, another Twitter-user responded, perhaps sarcastically: “To lose weight I am focussing on eating”.

Arora responded with, “And then not do it”.

That is, to lose weight, a person can track their eating and then do it more mindfully.