Warren Buffett avoids diversification and waits for one big opportunity to concentrate his capital. But the classic risk principle of not putting all eggs in one basket still matters: diversification protects you from total loss. The tension between aggressive concentration and prudent spreading plays out here.
I personally don't believe in diversification for diversity's sake. I think that's, there's, I'm trying to, I'm trying to be polite here, but there's a little bit of ignorance associated to that, right? And we see this a lot of big managed funds and superannuation and where they have to diversify just for the sake of diversifying. But then we look at like Warren Buffett who doesn't believe in diversification and he'll sit on billions in cash until he finds one great value-based deal and then just kind of puts all his money into it.
So my thing was, okay, I guess there has to be some diversity so you don't have all your eggs, you know, Nobody should have all their eggs in one basket. I think we all agree with that. Absolutely.
