There is still a lot to track. 40 conference calls, 40 investor presentations, possibly those of competitors. Please ask yourself if you truly do all the due diligence one should when owning direct equity. Not at all tryng to say that you should not own direct equity, only the following:
You must have some level of conviction in each stock which reflects in PF weight. Ask yourself what value bottom 10 or 20 stocks add. Wouldnt PF be better if bottom 20 were deleted? Much easier to track 20 companies than 40 companies. That would be my noob suggestion.
I work in the IT sector. My understanding here is good. Still would be risky to put 60% of net worth into IT sector. Let me explain why. Already my salary is exposed to or risked by IT sector (yours for BFSI). Why compound or increase that risk by having my assets reside in the same sector as well? It only doubles up my risk. Salary (+ Future salary) + 60% of equity PF all exposed to BFSI sounds like a risky proposition. Position sizing cannot just depend on how well i know a sector.
What about incremental capital addition? Like salary or profits that you get every year/month?
I dont know if i can agree with that tbh one can find many examples where expectations run ahead of fundamentals resulting in a crash. Do read about the US Nifty fifty bubble:
Something similar has been building up in India. Quality ke naam pe people are ready to pay 100 P/E to a business growing at 10-12%. Risky to deploy incremental capital at such high valuations IMHO.
Closer home, see the P/E, earnings and price of Poly medicure. Detailed post here:
Poly Medicure - at an inflection point! - #413 by sahil_vi