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Own 100 stocks — be massively diversified

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www.aggregate.com.sg10/23/2017 08:00 AM GMT+08  • 4 min read
Own 100 stocks — be massively diversified
(Oct 23): The idea that to do well in investing one must focus one’s bet on something that one knows inside out is a brain virus that must be terminated. It is responsible for the deaths of many portfolios.
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(Oct 23): The idea that to do well in investing one must focus one’s bet on something that one knows inside out is a brain virus that must be terminated. It is responsible for the deaths of many portfolios.

The two famous investors who preach this mantra are Warren Buffett and Peter Lynch. They are advocators of the focused approach to investing and have brought untold misery to many naïve investors.

Buffett advises that, imagine in your lifetime, you can choose only 10 stocks. So, pick only the best. Pick only what you know thoroughly and hold it forever. Pick the businesses with long-term competitive advantages and a defensible moat. “Diversifi cation is protection against ignorance; it makes little sense if you know what you are doing,” he says.

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