Chewy's founder piled most of a $3.4 billion fortune into just 2 stocks after selling the company
- Chewy founder Ryan Cohen only invested in Apple and Wells Fargo stock after he sold his company for $3.35 billion, Bloomberg Businessweek reported Friday.
- While the move is in stark disagreement with the oft-recommended strategy of diversification, Cohen said that he likes to "go all-in" when he finds bets he has "a lot of conviction in."
- In the two-and-a-half years since he made his bets, Wells Fargo shares have tanked. Yet Cohen's heavier investment in Apple offset the losses.
- The two-stock portfolio is up nearly 20% over the past 12 months.
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Chewy founder Ryan Cohen tossed much of a $3.35 billion fortune into Apple and Wells Fargo stock after he sold his pet-supply company, Bloomberg Businessweek reported Friday.
The move goes against the one cardinal rule of investing: diversification. Yet Cohen felt strong enough in his choices to take the risk.
"It's too hard to find, at least for me, what I consider great ideas," he told Bloomberg's Devon Pendleton. "When I find things I have a lot of conviction in, I go all-in."
The Chewy founder piled into Wells Fargo in the second half of 2017, when shares traded at roughly $54. The stock has since tumbled to roughly $31 amid regulatory scrutiny and the coronavirus pandemic.
Cohen was luckier with his Apple bet. The iPhone maker's stock has soared more than 120% over the same period and hit a new record on Friday amid a broad market rally. The Apple investment's heavier weighting offsets Cohen's Wells Fargo losses and fueled the two-stock portfolio's nearly 20% gain over the last 12 months.
The Chewy founder also bucked tradition by not establishing a so-called family office for his trades. Such private firms have served as the go-to methods for wealthy individuals to manage investments. Should Cohen's foregoing of a family office spark a new trend, private wealth managers stand to lose swaths of profits.
Cohen is sticking to his guns and riding out his portfolio's rough patch, telling Bloomberg, "I don't want to swing for a single." Yet the 34-year-old billionaire emphasized that his strategy is not for the faint-of-heart.
"You need to have the temperament to block the noise," he said. "Sometimes it feels like a rollercoaster."
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