To concentrate? Or to diversify?
This has really been on my mind a lot lately.
Buffett says diversification is just an insurance against ignorance.
Which is really a fancy way of saying that if you’re not entirely sure, or if you think you are sure but am concerned that the world may throw you a curveball, then diversification would help cushion any potential road bumps. But it works both ways. I don’t think it’s possible to get really really amazing returns in the long run if one diversifies too much.
Ackman’s Pershing square has what… $10billion under management? And he holds less than 12 names at any 1 time. And even that is misleading cos most of the capital goes to the top 5 or 6 usually. But he has a return of >50% in 2019 to show for.
Bill Miller really scored in 2019, with a +120% thereabouts, and
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