'Diversification is for the know-nothing investor' · Transcript · BuffettMungerGPT

CharlieThere have been times, I mean, we've seen all kinds of ideas we would have put 75% of our net worth in. Warren, there have been times in my life when I've had more than 100% of my net worth invested in things. There are situations you will see over a long period of time. I mean, you will see things that it would be a mistake if you're working with smaller sums. It would be a mistake not to have half your net worth in. I mean, there, you really do sometimes in security see things that are led by. And you're not going to see them often and they're not going to be talking about them on television or anything of the sort. But there will be some extraordinary things happen in a lifetime where you can put 75% of your net worth or something like that in a given situation. Students of America go to these elite business schools and law schools and they learn corporate finance the way it's now taught and investment management is the way it's now taught. And some of these people write articles in the newspaper and other places, and they say, well, the whole secret of investment is diversification. That's the mantra. They've got it exactly backass word. The whole secret of investment is to find places where it's safe and wise to non-diversify. It's just that simple. Diversification is for the no-nothing investor. It's not for the professional. And there's nothing wrong with the no-nothing investor practicing it. It's exactly what they should practice. It's exactly what a good professional investor should not practice. But that's, you know, there's no contradiction in that. A no-nothing investor will get decent results as long as they know they're a no-nothing investor, diversify as to time they purchase their equities and as to the equities they purchase. That's crazy for somebody that really knows what they're doing. And you will find opportunities that if you put 20% of your net worth in it, you have wasted the opportunity of a lifetime, you know, in terms of not really loading up.