Individual stock selection is only half the battle. How you combine stocks into a portfolio determines your actual returns. Concentrated portfolios can generate outsized returns but also outsized drawdowns. Diversified portfolios smooth returns but can dilute your best ideas.

Position sizing is where conviction meets risk management. Kelly Criterion provides a mathematical framework, but practical considerations (correlation, liquidity, conviction) matter too. Rebalancing discipline determines whether you buy low and sell high - or the opposite.

In this topic, you'll learn to construct portfolios that balance conviction with risk management, and develop the discipline to maintain that balance through market cycles.