Believe Quote by Charlie Munger
“We believe that almost all really good investment records will involve relatively little diversification. The basic idea that it was hard to find good investments and that you wanted to be in good investments, and therefore, you'd just find a few of them that you knew a lot about and concentrate on those seemed to me such an obviously good idea. And indeed, it's proven to be an obviously good idea. Yet 98% of the investing world doesn't follow it. That's been good for us.”
About This Quote
Concentrated portfolios of well‑understood assets outperform diversified ones because deep knowledge outweighs risk‑spreading.
In simple terms: Focus on a few high‑conviction investments.
Key Takeaway
Depth beats breadth.
Themes
investment strategy
risk management
knowledge advantage
concentration
behavioral finance
Mood
confident
analytical
pragmatic
Type
advice
observation
philosophical
When to use this quote
- selecting a handful of stocks
- private equity deals
- venture capital funding
- family office allocations
- value investing
Key Concepts
conviction
due diligence
portfolio concentration
information asymmetry
Practical Applications
- building a concentrated portfolio
- identifying high‑conviction opportunities
Questions to Reflect On
- How do you assess when concentration becomes risky?
- What processes ensure you truly understand each holding?
![“They [Mc Donalds] take people and give them a first job, which enables them to get a second job. They do a very good job of educating troubled young people to be good citizens and they're probably more successful than charter schools.” quote by Charlie Munger](https://sms4smile.com/quotes/img-quotes/a55/charlie-munger-458_be-good_they-mc-donalds-take-people-and-give-the_41809.jpg)
![“It is way less certain to be a wonderful business in the future. The threat is alternative mediums of information. Every newspaper is scrambling to parlay their existing advantage into dominance on the Internet. But it is way less sure [that this will occur] than the certainty 20 years ago that…” quote by Charlie Munger](https://sms4smile.com/quotes/img-quotes/8d0/charlie-munger-458_advantage_it-is-way-less-certain-to-be-a-wonderful_59627.jpg)
