Letters by Topic
Letters on Diversification vs. Concentration
The tension between the risk-reduction benefits of diversification and the wealth-creation benefits of concentrated positions in high-conviction investments.
1965·Early statement of Buffett's concentration philosophy
Wide diversification is only required when the investor does not understand what they are doing.
1996·Reinforcing the case for concentration when one has knowledge
Diversification is a protection against ignorance. It makes very little sense for those who know what they are doing.
Explore the concept
Diversification vs. Concentration is one of the ideas behind the ValueOS tools. See it applied to real companies.