Buffett believes in focusing on a few key investments from "summary" of The Warren Buffett Portfolio by Robert G. Hagstrom
Warren Buffett's investment philosophy revolves around the idea of concentrating on a select few investments. This approach is in stark contrast to the common practice of diversification. Buffett strongly believes that by focusing on a small number of high-quality companies, an investor can achieve superior returns in the long run. He argues that diversification does not necessarily reduce risk, but rather dilutes the potential for significant gains. Buffett's strategy is rooted in the principle of simplicity. By honing in on a few key investments, he is able to thoroughly research and understand each company, its industry, and its competitive position. This deep level of understanding allows Buffett to make informed decisions based on a solid foundation of knowledge. Rather than spreading himself thin across a large number of investments, Buffett chooses to concentrate his resources where he believes they will have the greatest impact. Furthermore, Buffett's approach emphasizes clarity and coherence. By focusing on a handful of investments, he is able to maintain a clear and consistent in...
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