Use a stable core for compounding and smaller satellite sleeves for high-conviction themes - without letting noise hijack your entire net worth.
Why core-satellite still works after every market fad
Investors chase the latest theme (AI, SME IPOs, smallcap momentum) and accidentally turn a diversified plan into a single bet. Core-satellite splits the problem: most capital sits in durable, understandable exposures; a bounded satellite sleeve expresses high-conviction views.
Building the core (typically 60-80% of equity capital)
- Large, liquid franchises or index-aligned holdings you can hold through 20-30% drawdowns.
- Businesses with proven cash conversion and manageable leverage.
- Position sizes small enough that no single name dominates emotional decisions.
Designing satellites (typically 20-40%)
- Theme baskets (capex cycle, credit growth, quant momentum) with clear rules and updates.
- Hard cap per theme and per stock; pre-defined review dates.
- Exit process when thesis metrics fail - not when social media panics.
Why this structure is necessary on research platforms
Research notes often highlight excellent midcap or thematic ideas that are not suitable as 40% of your net worth. Publishing frameworks alongside ideas helps readers translate insight into position sizes that survive bad years.
See how we implement process in Visibo model baskets.
This article is for education and information only. It is not investment advice, a recommendation to buy or sell any security, or an offer to apply in any IPO. Past patterns do not guarantee future results.