Diversification overrated? Not a chance by Jason Zweig
For anyone with a sustainable ability to identify the hottest investment of the moment, diversification is a mistake. But if you really believe you’ve got that ability, you’re not just mistaken. You need to be hauled off in a straitjacket to the Institute for the Treatment of Investment Insanity.
Exactly right. As we posted previously Warren Buffett’s diversification thoughts are similar
You have to remember when Warren Buffett says “professional and have confidence” he doesn’t really mean just what those words say. He mean if you are Charlie Munger, George Soros, Jimmy Rodgers and maybe 10 other people alive today (maybe I am too restrictive, maybe he would include 50 more people alive today, but I doubt it).
Related: Dilbert on Investing - investment risks - Curious Cat Investing and Economics Search Engine
Comments
1 Comment so far
I think the longer your perspective the more focused, and less diversified you can get away with. Warren says his favorite hold period is forever. You can ride out a lot of ups and downs if that is the case.
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Ned