Customer Quote by Charlie Munger
“The idea of excessive diversification is madness.”
About This Quote
Source Letter: Berkshire Hathaway Shareholder Letter, 1995
Excessive diversification spreads resources too thin, reducing overall returns and focus.
In simple terms: Too much diversification harms performance.
Key Takeaway
Focus investments for better returns.
Themes
investment
focus
risk management
Mood
analytical
cautious
Type
financial
strategic
When to use this quote
- financial planning
- asset allocation decisions
- investment committee meetings
Key Concepts
portfolio theory
opportunity cost
concentration risk
Questions to Reflect On
- When is diversification justified?
- How much concentration is optimal?
A Different Perspective
Diversification can protect against specific risks.
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