Thanks for your good words. I appreciate it..but I am still only 5-6 years old into investing and learning the ropes..so by no stretch of imagination I can be Guru to anybody. Having said that, it has been a wonderful journey with you and whole Gujarat VP team to work together and learn.
On risk assessment- I think, I am inherently a risk averse person. Moreover, Buffet's two rules about not losing capital, has stuck with me too strongly. Hence, the first thing that I look for is I should invest only if the probability of losing is low. Howard marks, is another Guru, who has imparted the importance of managing risk FIRST in investing process. So, I am naturally inclined to look at what all can go wrong in a business..first! Now, it has its limitation as it eliminates large opportunity set for me and also makes me pass an investment, where there are reasonably good chances of generating return but there exist a risk (which may not materialize over time) of losing capital.
On restricting my portfolio position, I think one has to take an approach that suits him/her the best. Even within our group we know people, who run extremely concentrated portfolio and have generated phenomenal returns. The reason I want to restrict my allocation to a certain level (typically 15%) is because I strongly believe, that no matter how deep your understanding of business and management is, there are factors in internal/external environment which you will either miss or are beyond your control or are not dealt with rationally always by stakeholders/management (We are not even considering our making mistakes!!.) Shit happens! Thus, you have only two ways to protect yourself against such eventuality, one valuation (price you pay) and second capital allocation. I prefer to manage it through both, typically!
Another thing that capping allocation does is, it lets me sleep easily at night, even if there is blow up in any one of the businesses.I think, that is a big motivator too!