My Thoughts On Diversification – Be As Concentrated As Possible

In my network of friends / family / colleagues, I’m most often known as ‘The Investment Guy’.

Because of this, I’m often asked about the latest trend in investing, whether it be years ago, gold and silver, the Greek Crash a couple years ago, or more recently, weed stocks and cryptocurrency.

Today I want to talk about something I get asked about all the time… Diversification – and why I think the traditional advice on diversification is harmful to you becoming rich.

In the 11 – minute video above, I detail why if you know what you are doing from a business analysis, investment, and value investment perspective, diversification makes zero sense.

Some of what I talk about in the video…

• Why I think this
• Why you shouldn’t diversify just to diversify
• Why diversification leads to average results in general
• This goes for any aspect of your life – jobs, learning a skill, investing, relationships, etc.
• Why the traditional advice is to diversify as much as possible – it has to do with perceived safety and funds getting your fees
• And more…

Here are the Great Warren Buffett’s thoughts on diversification.

Here’s a quote from the above – linked article…

“Diversification is protection against ignorance. It makes little sense if you know what you are doing.” Warren Buffett

And here are Charlie Munger’s thoughts on diversification as well…

“Mimicking the herd invites regression to the mean.” Charlie Munger

What are your thoughts on diversification? I’d love to see them in the comments below.

P.S. Check out our playlists in this series of investing and value investing educational videos here on our YouTube channel.

P.P.S. If you’d like to learn how to value and evaluate businesses like a world-class investor, check out our three programs that can help you do this; our Value Investing Training Vault, our Value Investing Masterclass, and our $10,000 Coaching Program.