Technically Buffett agrees and disagrees with diversification. His belief is that for nearly everyone, diversification probably should be the rule. This is for people who aren't into investigating every miniscule bit of data about a company before buying into it. But for those willing to do the work and wanting to go above and beyond what "the average joe" thinks is a good enough return, he doesn't believe diversification is a good idea. For those investors, he thinks buying more into 4 or 5 strong companies before investing into, say a 6th, is a far better idea. There was a quote attributed to him once that I don't know the exact wording but went something like : diversification is for people wanting to protect themselves from their own ignorance. Again, that's a paraphrase...
C just reported .... they were up to 4.33 and now down to 4.15-4.20. Revenue and earnings seemed to be better than expected, but I may have missed something.
Berkshire Hathaway owns more than 4 or 5 positions, no? A long time ago, Buffett via Berkshire had invested in that few of companies, but those days are long gone. Buffett via Berkshire is now very diversified. See link.
link. Out of approximately 50 companies on that list, it looks to be at least 7 or more in the insurance industry.
His comment is meant for those of us not running mega-billion stocks, funds, etc. He's stated that he could make ridiculous returns if he were running a smaller amount of money because he'd be able to focus on a smaller number of companies (I'd have to verify). Also, the last I recall, even now, about 70-80% of Berkshire Hathaway's allocation is in about 10 of those companies. His belief in "non-diversification" has not changed to my knowledge and he still espouses it in interviews.
I feel pretty good about buy FAZ at 10.30. I think this week and maybe next will be mostly red in the financial sector.
i finally unloaded FAZ yesterday around 12.02 for a 40% loss. figured it was about time to call it quits
As the unemployment gets worse CC default rates should go up even higher. The banks will have to write down even more loans.
But again, FAZ doesn't track an index over an extended period of time. It's going to lose value over time (and a lot of it). So the index could be 50% lower in 3 months but FAZ could still lose you money. You only hold FAZ if you think the market is going down in the next 1-2 trading days.
Well it's been about a 120 point swing down in the last half hour or so, I think. We were up 60 on the DOW and now down 60. The financials took a turn down fast in the midst of that.
