A Quote by Charlie Munger
The idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results.
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The idea of excessive diversification is madness.
It's important to Russia to be able to attract capital and to attract technology to develop their oil fields, their oil and gas fields, many of which suffer from lack of access to the very best technologies. And it's also important, and this has been the US government's view to have diversification of supply, diversification of supply roots and, of course, diversification in terms of alternative energy.
The Berkshire-style investors tend to be less diversified than other people. The academics have done a terrible disservice to intelligent investors by glorifying the idea of diversification. Because I just think the whole concept is literally almost insane. It emphasizes feeling good about not having your investment results depart very much from average investment results. But why would you get on the bandwagon like that if somebody didn't make you with a whip and a gun?
The best argument for mutual funds is that they offer safety and diversification. But they don't necessarily offer safety and diversification.
Wide diversification is only required when investors do not understand what they are doing.
It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment.
There is no question that an important service is provided to investors by investment companies, investment advisors, trust departments, etc. This service revolves around the attainment of adequate diversification, the preservation of a long-term outlook, the ease of handling investment decisions and mechanics, and most importantly, the avoidance of the patently inferior investment techniques which seem to entice some individuals.
Diversification is an established tenet of conservative investment.
I've always been a big believer in diversification for anybody. It's never good to put all of your efforts and all of your time and all of your financial resources into just one project. Diversification is key for any individual and any business.
Risk comes from not knowing what you are doing so wide diversification is only required when investors are ignorant. You only have to do a very few things in your life so long as you don't do too many things wrong.
As in most subjects relating to money management, there's a wide diversity of opinion on portfolio concentration versus diversification.
We believe that almost all really good investment records will involve relatively little diversification. The basic idea that it was hard to find good investments and that you wanted to be in good investments, and therefore, you'd just find a few of them that you knew a lot about and concentrate on those seemed to me such an obviously good idea. And indeed, it's proven to be an obviously good idea. Yet 98% of the investing world doesn't follow it. That's been good for us.
I think it's a promising time which will show a lot of diversification that we've seen in the past.
In a large congregation, while there is a wide diversification of interest, it is also true that there are only a few basic human problems. It must also be taken into consideration that people are people regardless of who they are or what their backgrounds may be. There are certain deep universal appeals to human interest and to these human nature always responds.
We live in a very risky world and investors should not get "carried away" with excessive allocations to equities, or for that matter, real estate. As always asset allocation and low cost and broad diversification will be essential in earning one's fair share of whatever returns our financial markets are generous enough to bestow upon us.
We can no longer let the threat of an early frost send a chill of fear throughout a large portion of our workforce. Diversification is the only answer.
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