We’ll talk about diversification, Warren Buffett’s famous Berkshire Hathaway portfolio, as well as the academic study that thought it had this question answered only later to be challenged.
Some people only have a handful, some people use funds to hold hundreds and hundreds. In this video, we will weigh up the opportunity cost of diversification against the advantages of spreading your bets.
0:00 – Intro
1:47 – The Birthday Paradox
4:19 – Downside to diversification
5:50 – Buying the haystack
6:53 – Allocate your capital according to your conviction
Some interesting links and further reading on the topic:
‘Some Studies of Variability of Returns on Investments in Common Stocks’ by Lawrence Fisher and James Lorie – https://www.jstor.org/stable/2352105
‘The Illusion of Diversification: The Myth of the 30 Stock Portfolio’ – https://www.investopedia.com/articles/stocks/11/illusion-of-diversification.asp
Оur Investing 101 series will cover the fundamentals of investing and will try to bring you the basics to build a solid foundation. Let us know in the comments about future topics you would like to see covered in these videos.
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All of them
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New woke haircut! 😎
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If next week’s CPI data is high, stock market is screwed😅 Better to wait until 2024 when QT is beginning to be let off and inflation is at the Feds 2% goal
Been Hearing This Since 2022
My strategy that earn me a lot of money was investing in many only trading 10 a week.
That casino references really good and I have actually witnessed someone do that at a roulette table they bet on one number and won
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KISS. Keep it simple stupid. I have 43 stocks, 39 divided paying. The rest growth. I do daily checks on industry and sector news to see upcoming issues. But so far, some are up, some are down. Main thing, be patient and don’t panic sell or buy. Do your research, and accept the risk. And never ever invest more than you can afford to lose.