tag:blogger.com,1999:blog-5297910739720462639.post1176196060579122180..comments2024-01-24T01:06:55.788-08:00Comments on Intelsense Capital Blog: Concentration or diversification - For a midcap or smallcap portfolioUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5297910739720462639.post-9374597909978662052012-03-04T21:13:31.520-08:002012-03-04T21:13:31.520-08:00Raja, Great points. Let me do a follow-up post on...Raja, Great points. Let me do a follow-up post on great business at a fair price vs a fair business at a great price.Abhishekhttps://www.blogger.com/profile/10981230195604730299noreply@blogger.comtag:blogger.com,1999:blog-5297910739720462639.post-54389215927545561832012-03-04T21:11:08.509-08:002012-03-04T21:11:08.509-08:00I think Berkshire these days has more businesses b...I think Berkshire these days has more businesses because they have more cash than they would ideally want as pure investors. That is why you see Buffet buying utilities and railroad companies which he would not have touch with a bargepole earlier. Now he has to do it to employ the cash continuously pouring in to their coffers.<br />But if you see his early days, Buffet was fairly concentrated in his portfolio and mostly worked on arbitrage opportunities.Abhishekhttps://www.blogger.com/profile/10981230195604730299noreply@blogger.comtag:blogger.com,1999:blog-5297910739720462639.post-17472570269984396452012-03-04T20:34:04.280-08:002012-03-04T20:34:04.280-08:00Hi Abhishek,
This is a favorite topic in my circl...Hi Abhishek,<br /><br />This is a favorite topic in my circle too. Concentration Vs diversification. One more topic is Beaten down Vs expensive but good quality stock. Of course the beaten down doesn't mean bad quality of stock but still...<br /><br />My thought process is, even though I (similar to you) might be small time investor's now, typically at the start of my career. We need to prepare ourselves for those years down the line when we might be managing/investing a bigger corpus. At least simply because of accumulation from our earning over this period.<br /><br />Investing in so few of them like done by your friend doesn't look like can be scaled well enough when the value of corpus increases and we are closer to our financial goals may be 10 years down the line. Losing 80-90% even from a single stock in the portfolio at such late stage can be very risky. Although at this stage it may not set us back by much because age is on our side.<br /><br />Also, like you said, since it's very difficult to understand everything about a business from a outsider's perspective so more number of stocks in our portfolio is like a insurance against our foolishness. <br /><br />Also not to forget, Buffet is a protege of Ben Graham 'the master' and Charlie had a thriving law practice and real estate business to fall back on :)Raja Pandahttps://www.blogger.com/profile/02623082490628245667noreply@blogger.comtag:blogger.com,1999:blog-5297910739720462639.post-49416053189879727472012-03-04T08:57:29.185-08:002012-03-04T08:57:29.185-08:00So right..
However, I feel this Buffett- Munger pr...So right..<br />However, I feel this Buffett- Munger principle is not even followed by Buffett-Munger themselves. As of today, he has more than 60-70 businesses... No?Fundoo_Pupilhttps://www.blogger.com/profile/01128565386470249700noreply@blogger.com