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As of today, NVIDIA is the largest position in our portfolio at over 13%, so we’re trimming it now that the merger has gone through. What do we consider “too big?” Well, most portfolio managers might say that in a 30-stock portfolio, anything with a weighting of more than 10% would be considered “too big” at which time you would then start to slowly trim ( sell shares of) the position. When a stock in your portfolio soars to the moon, oftentimes it will become too big a portion of your entire portfolio. In other words, you don’t want to put too many eggs in one basket. When you’re managing a portfolio of stocks, you need to set some rules to ensure proper diversification (it’s related to that portfolio variance thing we discussed earlier). Of course, they’re only paper gains until you sell. Here’s how you would have fared on the trade:īy holding NVIDIA from when the split was announced until today ( the day after the stock split took effect), you would have realized some seriously delicious alpha. Today, shares are trading at ( sneaks peek at market) $194.60 a share. The day the split was announced, shares closed at $149.92. ( If you’re the sort of person who thinks that a $10 stock is “cheaper” than a $100 stock, here’s a refresher on stock splits.) The terms of the split were simply as follows:Įach NVIDIA stockholder of record at the close of business on June 21, 2021, will receive a dividend of three additional shares of common stock for every share held on the record date, to be distributed after the close of trading on July 19, 2021. On May 21, 2021, at 9:00 AM Eastern Time, NVIDIA announced their stock split. NVIDIA ( NVDA) has been no exception to that rule, with shares soaring since the announcement of their planned share split. For example, stocks typically outperform the broader market from the time they announce a split until shares start trading at split-adjusted prices. If you’re a glutton for punishment, do a Master’s in Finance, during which you will learn a handful of useful things based on studies that someone spent too much time on. They’ll make you do things like manually calculate the variance of a portfolio, something that sounds about as fun as it looks. Some of the topics are absolutely dreadful, not to mention the teachers.

Don’t study finance if you’re the sort of person who detests boredom.