Sublime

The problem with small positions, such as a 1 percent position, is that if you're right and the asset goes up 100 percent the portfolio only goes up by 1 percent. There's no point in taking that risk for a 1 percent increase. At the same time, if you make an Aggressive investment worth more than 10 percent of your holdings, you could lose 10 percen

1½ times net asset value. Price no more than 15 times average earnings of the past three years. We make no predictions

It is the big swing that makes the big money for you.

However, remember that we want your first ten investments to be $1,000 syndicate-level swings at bat so you can learn at the low-stakes table, where mistakes aren’t devastating. After that, in this book, we talk about making twenty $25,000 bets and quadrupling down on the winners with a $100,000 follow-on investment.

Folks in the technology industry debate if angel investing is gambling or actual investing, and it depends largely on how you approach it. Every year I place forty bets hoping to win back more in aggregate than I’ve put down.

If you love taking risks and don’t mind being locked up for a decade, I could see you putting 10 to 20 percent of your bankroll into angel investing. If you can tolerate risk, but don’t love it, and you can handle being illiquid for a decade, I could see you putting 5 percent of your bankroll into angel investing.

At the time of writing, pension funds and insurance companies in the United States and in Europe somehow bought the argument that “in the long term equities always pay off 9%” and back it up with statistics. The statistics are right, but they are past history. My argument is that I can find you a security somewhere among the 40,000 available that w