55 Tips about Diversification

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If I didn’t have partners, the concentration [65% of the portfolio in the top seven stocks] would be even higher. A company compounding capital at...
According to the modern portfolio theory, you'd come very close to achieving optimal diversity after adding about the 20th stock. In Edwin J. Elton...
Diversification is a big part of our risk management. An important percentage of Omega’s total capital is our own money and we’re just trying to...
People tend to assume that the only form of active portfolio management is through relatively concentrated portfolios. We think there's an equally...
Diversification is like ice cream: most people would agree that both diversification and ice cream are "good" things. This doesn't mean you can't have...
What works for us is between 10 and 20 positions. Owning more than 20 stocks, it’s too hard to follow the companies very closely, and a big winner...
Our ideal is 25 roughly 4% positions, though the reality varies around that. We believe concentration is tied to outperformance, but many...
If you are a know-something investor, able to understand business economics and to find five to ten sensibly-priced companies that possess important...
If you are a know-something investor, able to understand business economics and to find five to ten sensibly priced companies that possess important...
One situation requiring wide diversification occurs when an investor who does not understand the economics of specific businesses nevertheless...
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