The engine, not the magic
Five names is not five times the luck. It is one signal, held at full size.
Five slots . equal weight . each name carries a fifth of the book
| Per week, 5Y backtest | Focused Alpha 5 | Nifty 50 |
|---|
| Average up week | 3.71pct | 1.51pct |
| Average down week | 3.01pct | 1.56pct |
| Weeks finished green | 59.39pct | 57.47pct |
| Sharpe | 1.61 | 0.79 |
When the screen is right, a winner runs at 20 percent weight, not 2, so it actually moves the book. The up week is bigger than the down week, and a few more weeks finish green. That small asymmetry, compounded across 88 three-week rotations, is the whole CAGR. The same 20 percent weight is why a wrong call digs deep. No debt, no gold, no defensive overlay to soften the fall.
The read
The return is not a lucky stock. It is a positive-asymmetry bet held at full conviction and rotated often. The price of full conviction is the depth of the hole.