Diversification good or bad?

Discussion in 'Risk Management' started by oraclewizard77, Jan 22, 2009.

Diversification is the holy grail.

Poll closed Feb 1, 2009.
  1. Stay Diversified

    8 vote(s)
  2. Concentrate your portfolio in just a few stocks.

    2 vote(s)
  3. Stay with Cramer

    1 vote(s)
  4. Way too many polls here on ET

    0 vote(s)
  1. Innocie


    My suggestion is having a right diversification can help generates a very good return.
    When I say "right", it means it should be diversification of best of one or two in each category in each industry or each group, but not random picks.
    Say for instance,
    In finance industry, pick 2/3 best stocks (best one for large cap and best one for midcap)/best small cap),
    In transportation industry, pick 1 best stock.
    In technology, pick 1 and so on.

    That's what I call it a "right diversification."

    And it's always wise to diversify the industries. :)
    #51     Jul 20, 2018
  2. ironchef


    So what are your criteria for "best"?
    #52     Jul 20, 2018
  3. qxr1011


    ===Diversification good or bad?===

    it mostly uselsess
    #53     Jul 20, 2018
    murray t turtle likes this.
  4. %%
    Sounds right;
    but since DOW transports have changed so much since 1929-33, i may find a more suitable sector than that for me.:cool::cool:I guess, now that Mr Buffet diversified in to tech stocks like AAPL; i guess its OK to diversify......
    #54     Jul 20, 2018
  5. qxr1011


    ====i guess its OK to diversify......=====

    diversification is no substitution for the working method

    those who have it - concentrate

    those who don't - can diversify (put a bandage on the otherwise exposed ass)

    Leo Tolstoy once said:"In the life you are either strong or you are asleep"
    #55     Jul 20, 2018
    murray t turtle likes this.
  6. %%
    Thats a key to strong health;
    proper sleep.:cool::cool:That's right. NOT sure if it helps GE,or DB but should help most. NOT a prediction
    #56     Jul 20, 2018
  7. Innocie


    Best diversification?
    That would be the one when you take a comparison of all picked stocks with its competitor (stocks) fundamentally/ technically. Growth of revenue, debt, dividend plays the major role.
    #57     Jul 21, 2018
  8. ironchef


    Thank you.
    #58     Jul 21, 2018
    murray t turtle likes this.
  9. It's a phrase used by advisors to churn accounts. And make others appear like they know what they're talking about. Many BRK investors own 1 stock, and became wealthy. Warren has something to say about the topic.
    #59     Feb 10, 2019
  10. ironchef


    Peter Lynch's definition of diversification: Diworsification.
    #60     Feb 13, 2019