Credits to GrandpaLemon from investing note for his wise words


Financial experts are keen to tell you to diversify your hard-earned money into a variety of assets such as stocks, bonds and real estate to get the best returns while hedging our risks but there is a powerful counter view.

A short quote from Warren Buffett in 2008 (similar to his 1998 comments):

“If you are a professional and have confidence, then I would advocate lots of concentration. For everyone else, if it’s not your game, participate in total diversification. If it’s your game, diversification doesn’t make sense. It’s crazy to put money in your twentieth choice rather than your first choice.

Charlie [Munger] and I operated mostly with five positions.

If I were running $50, $100, $200 million, I would have 80 percent in five positions, with 25 percent for the largest.”

And then a longer excerpt from the book about Charlie