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Author: Stebalo One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 4958  
Subject: Re: more diversification required Date: 2/8/2002 10:59 AM
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I have read 2 answers to this question, both at either end of the spectrum.

I have heard, do not have more than 2-4% of your money in any single stock to reduce volatility. The only place you can really afford to do that is at an all you can eat broker like B&H

The other thing I read recently in the book _Buffetology_, it goes "Buffett prefers to concentrate his investments in a few strong companies that are priced well. He feels that diversification is performed by investors to protect themselves from their stupidity. "

Personally, I diversify only as much as I can research the companies well, and provided only that I like what I see. I won't buy anything just to be diverse. Rather, I look for new good opportunities that I believe in. If you go the 4%/stock route, I don't think you have time to adequately research and keep up on 25 different companies.

My largest single stock holding is roughly 12-15% of my total portfolio.
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