When I worked at the Palm Beach Research Group, an investment newsletter, several years ago, there was a team assigned specifically to the task of determining the proper asset allocation model for our subscribers.
This process involved up to a dozen people at times and took dozens of hours to decide on. It made no sense to me to spend this much time on this subject, but I know I’m in the minority here.
I have a far different take on asset allocation than almost 99% of other investors. I pay ZERO attention to asset allocation as a whole, and I’m extremely undiversified in the “normal” sense of the word.
Yes, I know I’m in the minority here. I focus on and pick individual businesses and real estate to buy… So called good to great business / assets by Warren Buffett and other prominent investors.
I’m happy to own these assets for the long term unless something within the asset changes or I miss something in my initial analysis that I find out later, or I find something better to own and put that capital towards. And I pay zero attention to “normal” asset allocation / diversification recommendations.
Why?
Because I know what I’m doing and put in hundreds of hours of research into every asset I end up buying, so I know each intimately.
I believe so little in “normal” diversification, that a couple years ago after several companies I own in the portfolios I manage got bought out, that I owned only 2 companies stock and the rest, or about 80% of those portfolios, was in cash while I waited to find new investments to buy.
My rule for asset allocation / diversification is far simpler than the process I outlined above, that we undertook while I worked at the investment newsletter.
Click Here To Join Our Newly Relaunched Masterclass To Become A Great Value Investor Within Weeks.
Here's What Matteo A. Said About The Masterclass - "Good choice to decide to join this group. I made the same decision as you to seriously learn investing and this seems a great place to start. You will learn a lot from this course and Jason is always available to help you with any questions or doubts you may have during the journey."
If something causes me to lose sleep at night, I need to sell it. My thoughts on asset allocation and diversification are as simple as that.
***
P.S. Check out our other value investment education videos on our YouTube channel and make sure to subscribe to our channel to get all our new videos as they’re released.
P.P.S. I’m giving away FREE copies of my acclaimed value investing education book How To Value Invest. To get your free copy, go here.
