Diversification is protection against ignorance. It makes little sense if you know what you are doingAh ha! You must be thinking you are an investor who does all the due diligence and of course you are not ignorant. So you must not diversify. Just focus on a few stocks and wait for the money to roll in. Right? Buffett went further with his analogy in baseball, and the same philosophy he holds with the player, Ted Williams. As a batter in baseball, you want to hit the ball as ......
There is this ongoing debate about the number of stocks to have in a portfolio.
5?
15?
30?
Which number is the best?
When we are troubled by such decisions, we would refer to the words from people who we deemed to have authority.
And the first guy who comes to mind is none other than Warren Buffett, and he said