(AP Photo/Nati Harnik)

“Behold, the fool saith, "Put not all thine eggs in the one basket" - which is but a matter of saying, "Scatter your money and your attention"; but the wise man saith, "Put all your eggs in the one basket and - WATCH THAT BASKET ."
― Mark Twain, Pudd'nhead Wilson
Conventional wisdom dictates that diversification is essential to long-term investing success. You're often told to spread your money across a variety of stocks or asset classes to protect yourself from risk.
However, some of the best investors, like Warren Buffett, George Soros, William J. O'Neil and Bernard Baruch spoke about the virtues of holding concentrated positions. “Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they’re doing.”

Think about it - do you have the time to keep on top of dozens of companies in your portfolio? The average person simply cannot pay enough attention to a broad spectrum of stocks in a variety of industries and/or asset classes.
“It is unwise to spread one’s funds over too many different securities," said Bernard Baruch. "Time and energy are required to keep abreast of the forces that may change the value of a security. While one can know all there is to know about a few issues, one cannot possibly know all one needs to know about a great many issues.”


Here's Why Warren Buffett And Other Great Investors Don't Diversify

(AP Photo/Nati Harnik)

“Behold, the fool saith, "Put not all thine eggs in the one basket" - which is but a matter of saying, "Scatter your money and your attention"; but the wise man saith, "Put all your eggs in the one basket and - WATCH THAT BASKET ."
― Mark Twain, Pudd'nhead Wilson
Conventional wisdom dictates that diversification is essential to long-term investing success. You're often told to spread your money across a variety of stocks or asset classes to protect yourself from risk.
However, some of the best investors, like Warren Buffett, George Soros, William J. O'Neil and Bernard Baruch spoke about the virtues of holding concentrated positions. “Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they’re doing.”

Think about it - do you have the time to keep on top of dozens of companies in your portfolio? The average person simply cannot pay enough attention to a broad spectrum of stocks in a variety of industries and/or asset classes.
“It is unwise to spread one’s funds over too many different securities," said Bernard Baruch. "Time and energy are required to keep abreast of the forces that may change the value of a security. While one can know all there is to know about a few issues, one cannot possibly know all one needs to know about a great many issues.”


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