"Much of what is taught in modern corporate finance classes is twaddle." Gotta love Charlie Munger.

“Diversification is a protection against ignorance”

@piratepat44

4 жыл бұрын

Yep, but one of the first rules of the Intelligent Investor, written by Buffet's teacher, is that an investor should use his own ignorance and respect of it as his most powerful weapon. Buffet's biggest condition here is "IF you understand them", 3 businesses can get you very rich. A lot of people think they understand businesses, but extremely few actually do I think.

@Knowledge.to_Come

4 жыл бұрын

Patrick Noble thats why he also says 3 not one. Because maybe 2 of the 3 you were sure of doesnt work out at all like you planned, the third one should compensate for everything. But its true what warren buffet says, everyone is just sitting around impatiently waiting for warren to give them the golden answer to quick riches. Every time the man speaks, everyone listens, everyone goes silent, even the crickets. The truth is hes said the golden answer to riches many times over and over, but for most people its not the answer their looking for.

@zabatiel

3 жыл бұрын

@@piratepat44 precisely what he said. But you had to chime you read Benjamin Graham’s book. Inherently he implied it, no need to elaborate, subjectively speaking.

@tassv5909

3 жыл бұрын

@@piratepat44 easy. just copy all of Buffetts buys?

@somerandomperson3970

2 жыл бұрын

Wide diversification, as in investing in something you know has and/or would probably return shit

Didn't Charlie Munger and Warren Buffett invent the strategy of buying/investing when the market is low and also buying/investing when the market is high? As Warren Buffet said, he has seen this happen many times in his life. Not an investor. My wife and i never earned more than a middle class salary. We plan to get retired at 58 with a stock portfolio worth $4M. We have never sold so much as one share of stock...

@hermanramos7092

11 ай бұрын

It really isn’t about how much you save, it’s about how you manage your money. Whether you work to earn income or invest, it still boils down to income vs expenses, so yeah you may look into financial advisors for a strategy that suits your timing....

@martingiavarini

11 ай бұрын

i've been doing this same thing myself. Can't get into trouble with the IRS when I have no income and all my money is in stocks. I don't like doing the work though. Lol. So I just invest through an advisor who does the stock picking. My money grows, and I'm tax-free...

@bob.weaver72

11 ай бұрын

Do you mind sharing info on the adviser who assisted you? been saving for pension since age 18 - company scheme. along the way I hit higher tax, so I added to my company pension with a SIPP (tax benefits) I'm 46 now and would love to grow my finance more aggressively, there are a few cars I still wish to drive, a few mega holidays, etc

@martingiavarini

11 ай бұрын

Have you heard of‘’Catherine Morrison Evans’’ ? She gets featured regularly on CNBC. I myself use tax-deferred accounts to hold my investments. That way I avoid capital gains taxes. There are other options your advisor could brief you about....

@bob.weaver72

11 ай бұрын

The advisor I use is actually quite known, you might have come across her before, “Catherine Morrison Evans” she's been featured on several articles, you can search her name

I am always amazed at how smart these two are. Even though I watch them a lot I still finish videos shaking my head over how obvious what they are saying is but I didn't see it before.

@tassv5909

3 жыл бұрын

they should sell head rests below the video for all the head shaking we did :D

Diversification is a protection against ignorance. There’s nothing wrong about that. If you don’t know how to value businesses, diversification is very important and valuable.

@brunomanco7529

2 жыл бұрын

Not just that. People think of them as stock investors but they are business owners, they buy companies or shares of companies and run them, and receive dividends (some times even special dividends from agreements). If you are not a business owner that has a capacity to issue something like 30 year bonds to buy companies dont mind this

@wantokwok8160

10 ай бұрын

@brunomanco7529 I agree on the first one. Buffet now views investing as a conglomerate, not a mere fund manager or private investor. But I disagree on your conclusion. There are "ordinary" people, not a businessmen who successfully doing stock picking. But since your shares are not significant, you need to sell them to realize profits once the stock price hits your price target, not holding the stocks forever.

"its crazy to own 50 stocks, or 40 stocks..." Peter Lynch has entered the chat.

@samsuyarjafar9966

3 жыл бұрын

Unlike Buffett, Peter Lynch is a mutual fund manager. He was not allowed to do acquisition or buy company that is not listed on stock exchange. He was also limited by a rule that he is only allowed to buy not more than 5% shares of a company. That forced him to spread huge fund on a lot of listed companies thus highly diversify his portofolio. That is why Peter Lynch is a genius: despite limited by many rules, still he could grow the fund exponentially. Fun fact: Warren Buffett and Peter Lynch admires each other. Everybody who actually read Peter's books, study his method and read any articles about him would know that.

@billybillson9831

2 жыл бұрын

@@somerandomperson3970 pewpew

@putinski666

2 жыл бұрын

@@billybillson9831 can you try to read what the guy above you wrote?

@teemuvesala9575

2 жыл бұрын

Peter Lynch is forced to own that many and is limited by many rules applied to him. It is crazy to own 40 or 50 stocks especially for the average Joe. Just owning AAPL, AMZN, GOOGL, MSFT would have been very safe and rewarding strategy for the average Joe the last 10 years. Greatly outperformed all the wannabe pros with their 50 stock nonsense portfolios.

"There are alot of Greek letters that make you feel like your in the big league" hahahahah RIP Modern Corporate Finance

@SupremeCommanderBaiser

3 жыл бұрын

You're

@Stoneface_

2 жыл бұрын

@@SupremeCommanderBaiser your

@hondusspa

2 жыл бұрын

@@Stoneface_ actually it’s you’re for “you are.” “…like [you are] in the big league.”

@Stoneface_

2 жыл бұрын

@@hondusspa thanks Mr professor 😁

@user-cs6bg4zp5q

2 жыл бұрын

So true. They bother us with this garbage at business schools, but it is utterly useless.

In fairness, Berkshire is a holding company. Buying Berkshire is the same as buying multiple businesses.

You don't diversify for diversification's sake. Diversification is an effect of analyzing a bunch of companies and listing down the best ones. Simply, you don't put a specific number of companies to invest, It just "happens" gradually as you analyze and find great companies. This is what Buffet/Munger means.

@tomd1434

3 жыл бұрын

I think you’re right

@sausas8209

2 жыл бұрын

@@tomd1434 Jup, but there are actually professors out there saying that if you own x amount of companies, you're bound to make money. Which is a strange idea to give young investors. Just buy index funds if you're going to be that uninformed about where you put your money. 30 bad businesses will not beat index in the long run.

Useless to say, these guys are the best

@fendermon

5 жыл бұрын

I know they are the best; I just don't buy that one assertion. They have 80 companies in BRK last I heard: Apple, Burlington, Geiko,, Nebraska Furniture, Sees, Precision Cast Parts....Dairy Queen, banks, airlines...etc. Sounds diversified to me. It makes for a fun sound byte though.

@fendermon

5 жыл бұрын

I haven't looked at the percentages; you may be right. @Sanjay Khosh

@fendermon

5 жыл бұрын

True, they absolutely used to bet the farm on just a few companies, now not as much. It's a different animal out of necessity. @@Gallant972310

@fendermon

5 жыл бұрын

I would expect you are right. @@Gallant972310

@kenzangeobio3054

5 жыл бұрын

@@fendermon Berkshire Hathaway is a $500+ billion company. There are no 3 great companies large enough and selling at a good price that Warren can buy and add up to $500+ billion. Those companies you mentioned were acquired over a very very very long period of time. It is quite clear the purpose was not for diversification, but because they have been so successful in generating more cash and have to acquire more good companies. Do you expect them to stop buying after 3 companies or what?

At the time of this video recorded, he was 65 years old and worth a little over $10bill

@thecrowing1989

3 жыл бұрын

This adds an insane perspective

@steelknight2012

6 ай бұрын

Compound interest

He speaks nothing but sense.

@wahyuramadhan195

Жыл бұрын

👍👍

I've always thought of "diversification" as more a strategy for fund managers than retail investors.

@leeweisshaar1035

2 жыл бұрын

No. It's important to retail investors.

@Samsonight33

Жыл бұрын

Michael Saylor had an interesting take on this as well. In 2010 he was told by his advisors to diversify, he didn’t he focused on plowing money into Amazon Apple and I think Google. He won that bet.

@mensrea1251

3 ай бұрын

It’s probably not even a good strategy for fund managers.

99.9999% of people who invest: Diversify, Diversify, Diversify.. Warren Buffett: 3 wonderful businesses is better than owning a handful. That's how fxxkin good he is..

@fendermon

3 жыл бұрын

@@DrJetset Yes, owning only 3 stocks would be the ruin of most people who have more to do than read.

@mrshetty2019

3 жыл бұрын

But the book intelligent investor says otherwise

@fendermon

3 жыл бұрын

@@mrshetty2019 Well, it didn't work for me. Mary Barra CEO of GM said it is impossible to know everything about GM. There are a lot of moving parts in any business. For me it seems impractical.

@vanshkhanuja8611

2 жыл бұрын

@@mrshetty2019 Because the strategy in the intelligent investor is about arbitrage, the net net stocks of Graham. It's essential to diversify following that strategy, but Buffett has switched to Philip Fisher and Munger later in his career because huge sums of money required a different approach.High quality cash flow generative businesses doesn't require diversification

Don't put all your eggs in one basket unless it's a good basket.

@tassv5909

3 жыл бұрын

#Liverpool FC

“The high priest would never have the edge over the lay people” My word, these two are bursting bubbles in more ways than one! 🤣

Smaller, speculative stocks have endured a historically weak stretch. Investors are betting that a turnaround is finally in the works. I’ve lost about $320k within a few months, how do i take advantage of the market turnaround?

@rickertcoles

11 ай бұрын

Well the bigger the risk, the bigger the reward and such impeccable decisions are better guided by professionals.

@GeorgeNN

11 ай бұрын

Very true. Despite having no prior investing knowledge, I started investing before the pandemic and pulled in a profit of approximately $950k that same year. In reality, all I was doing was getting professional advice.

@laportafrank

11 ай бұрын

That’s impressive, have you always had a financial advisor?

@GeorgeNN

11 ай бұрын

My consultant is Nicole Desiree Simon She has since provide entry and exit points on the securities I focus on. You can look her up online if you care for supervision.

@laportafrank

11 ай бұрын

I just checked her up online, and I must admit that she has an extremely outstanding experience in investment. Thanks for sharing. I'm going to send her an email right away

The table cluttered with junk food... :D

@mehbubulalam7889

5 жыл бұрын

Benjamin E. Breitenbauch buffet loves a good buffet :)

@ghanditonatiuh6004

4 жыл бұрын

@@mehbubulalam7889 Totally agree. I have nothing but admiration for the great investment strategy talent, but there is a bad example of promoting junk food and poor helth (ethical cunundrums)

@Fizban321

3 жыл бұрын

Well Warren said regarding his diet that he looked up an actuarial table and found that six year olds are the least likely to die, so he eats like one.

@dylanjennings1687

3 жыл бұрын

@@ghanditonatiuh6004 Buffett isn't promoting junk food and poor health. That is what he eats.

@RolyTheHolyPaladin

3 жыл бұрын

@@Fizban321 Lol. That's like expecting a 6 month old car fresh from the assembly line to not die either. Then looking at a 60 year old car. Well that fuckers rusting everywhere you can see and then some and also falling to bits every 5 seconds if it's not taken care of correctly. P.S. Go to a finance person for financial stuff, go to a health person for health stuff is also another thing to add to my comment.

A gem from a legend.

Berkshire is diversified because of Berkshire's large cash flow. The company generates so much cash internally, it is impossible to reinvest it into the same companies that generate the cash. Geico is an example which generates so much cash but Berkshire can't keep putting money into Geico or Sea's Candy for example. The money comes out of so many businesses and Berkshire finds a way to reinvest it. Warren and Charlie are both strictly against a dividend so that seems like a completely last resort. Berkshire also maintains about 20% of its total assets in cash for insurance reasons. The company has more than 25 companies in the insurance business and were a catastrophe to hit, Berkshire is well capitalized to sustain the claims. Buffett has spoken about this at almost every annual meeting. I don't think Buffett wants to PERSONALLY be so diversified within Berkshire. His biggest personal holding we know of is Berkshire. He may own small amounts of other companies and he has said this but they are pretty insignificant to his overall net worth. Like you holding 1 share of Ford for example. It won't rock the boat in any way. But within Berkshire, they need to continually find where to put all this extra cash and that makes it for Berkshire to own stakes in a lot of publicly traded companies. Personally I've always wondered why Buffett didn't continue putting cash into Coca Cola which seems to be one of the businesses he loves the most. It seems to me acquiring more and more shares over the years and reinvesting the dividend even at higher prices may have been mighty lucrative for Berkshire but he may have his own reasons.

@abitamimbharmal1498

3 жыл бұрын

Because shoving stupid amounts of money in Apple seemingly made more sense and is literally the thing thats pushing their stock price up.

@JP1234815

2 жыл бұрын

If Warren continually reinvested Coca Cola's dividend back into the Cola Stock then he would own more than 10% of the company and this would create all sorts of 'red tape' with regards the SEC which Warren doesn't want. By holding Coca Cola so long he can continually look for value stocks and compounding can work even harder.

@JP1234815

2 жыл бұрын

@@abitamimbharmal1498 Not just Apple. BNSF was bought for about $38 billion about 10 years ago. In the last Berkshire meeting Warren intimated that the holding is now worth slightly more than Union Pacific stock (regarded as being of similar size to BNSF). Union Pacific stock had a Market Cap of $152 billion as of Feb 2022. If my calculations are correct that means BNSF has increased by over 4 fold in a decade.

@deltaphi9770

2 жыл бұрын

A company that pays out most/all of their free cash flow as dividends of course may not be able to sustain the payout indefinitely and lack of capex could harm future earnings. On the other hand, Coke a Cola generated so much earnings and free cash flow over the years, they could pay out some of that to shareholders, growing this over time, while also buying back shares, AND reinvesting in themselves. Berkshire now earns about 50% pa. on it's Coke a Cola cost basis in dividends alone so it's not surprising they don't buy more nor sell buy simply hold.

@drdrjr13

2 жыл бұрын

@@ErinP123 I’m fairly certain that he hasn’t said anything about never buying another share. If the stock would fall 90% it would be foolish not to buy.

"The high priest would never have an edge over the laypeople and that never sells well". Cash-rich they are now ready to pounce on the bankruptcies about to appear from the smile of the fading Cheshire cat.

I am from a technology background. And I never invested in tech because the tech stocks are most often priced by people who don't understand technology.

@cheeveka3

Жыл бұрын

The prices finally dropped time to buy 😂

7:07 "The high Priest wouldn't have any Edge over the lay people. That never sells well." 😁

Thank you so much for sharing such useful great appreciated!

I don’t know why they still preach diversification in college. The correlation between different asset classes, industries and sub sectors are considerably high. Even different financial markets of other countries are highly correlated. If America sneezes, the world catches a cold. These guys know this that’s why they’re the richest.

@m.morininvestor9920

4 жыл бұрын

Is that why they invest only in USA ?

@fredatlas4396

3 жыл бұрын

Because for most of us diversification works, government bonds for example still appear to go up when stocks crash just look back to March. So it doesn't matter so much what the different asset classes are doing on average its how they react in market downturns. Active fund managers and the industry don't want people to follow the passive strategy and use index funds, buy and hold, just have maybe 2 or just a few low cost well diversified index funds and stay the course. The reason being is that active managers , financial advisors and the investment industry are making loads of money out of us instead of making us richer

@deepeshchetwani6250

2 жыл бұрын

Because they don't teach how to analyse business 😂😂

@teemuvesala9575

2 жыл бұрын

@@fredatlas4396 Bullcrap. Owning a few great companies is much better than nonsense index funds. Sheep are just lead to believe they're much safer with index fund. Owning something like Apple has been very safe and much more rewarding than the overall market. In fact you could say index funds are kind of overvalued, since they include all sort of trash companies there. Index funds are not very efficient at all... And that doesn't mean I advocate active funds either. Just buy and hold dominant companies in growing industries.

3 wonderful business's. Life is set. Identify

I think the one thing that should really have been addressed is the unforeseen. You can understand an excellent business very well, but what if there's an event its future that severely damages it in some way? I'm mostly thinking of technological disruption. Railroads were excellent stocks to own until they weren't. DVDs eliminated VHS, but streaming eliminated DVDs. (Not completely of course, but they're a tiny fraction of their former market). No business is completely invulnerable to the world changing.

Ive been followimg his advice of concentration very seriously, currently holding onky 4 wonderful small businesses for the last 2 years, made 300% return, it really works because average focus often leads to average results

Great uploads!

If you are don’t know how to invest diversifying is a good idea. For those who want to learn A Teenager’s Guide on how to Invest Like Warren Buffett and Charlie Munger teaches the investment principles key to their success.

I love these two Guys

But Berkshire is a huge diversified business itself :Candy,carpet,insurance,banking,energy,car dealership,real estate etc...its like a Dow Jones...but of Top companies!

@piratepat44

4 жыл бұрын

That might be because Buffet and Munger don't control the company, they are mainly the founders and powerful board members, but I suspect there are some other powerful board members and shareholders that are in more favor of diversification

@627horsepowers

3 жыл бұрын

It is because of their huge size. Buffett explains that in other tube videos. Early on Berkshire was very focussed gradually diversifying.

TSMC, Ememory and Xintec

He says that if you know how to value businesses it is crazy to own 50-40-30 stocks but well... he is doing exactly that. As of today Berkshire Hathaway 47 stocks.

I love a good buffet.

good stuff Thanks

1:24

I'm sure the people who had Enron, Worldcom, and Bear Stearns in their portfolios wish they had some more diversification. The question is not whether you know the businesses you are invested in, it's what DON'T you know....

@markarmage3776

Жыл бұрын

That's not how it works, pal. It's whether you know or you don't know. There's no such thing. If you don't know, it means you don't know. Those companies fail because a massive part of those companies are unstable. If you don't know about those massive parts of the companies , you don't know the companies. You have a piece of paper, only reading 20% of what's on the paper doesn't mean you have read the paper, pal. You need to read all of them, or at least, the important parts. Go learn some math

@chrisrautmann8936

Жыл бұрын

@@markarmage3776 Last time I checked, there was one guy who figured out Madoff was a Ponzi scheme. One. And, there was nobody who thought that Enron was in trouble while the stock price kept going up up up. And, Worldcom wasn't showing signs off issues until well into its collapse. And the people who were neck deep in those companies had no idea, either. Remember when Sarbennes-Oxley was put into place? That was BECAUSE of the fraudulent accounting practices that gave us those three. The scope and depth of the information that has to be provided now is beyond the knowledge of a lay investor. If you're not a pro, you DON'T know. You CAN'T know. FFS, the entire BANKING SYSTEM didn't know what it was doing in 2008. It damned near destroyed capitalism because nobody could figure out that there was a bubble. As for "the important parts," have fun describing what those actually are. And then try to do it without an accounting degree. Because, when even the experts don't know what the fuck they're doing, the rest of us are basically sheep being led to the slaughter.

Excellent talk

so jack bogle sold indexed funds i.e. diversified etf's all his life and on his passing warren said something like bogle's was the highest achievement in the world of investing for having made so many people so much money. can someone square this video with the mentioned comment ? thanks!

@h.a.s.7336

5 жыл бұрын

I think Buffett may be referring to the fact that Bogle provided a way for the average person to invest in the stock market. Not everyone will have the aptitude, time or interest to learn everything you need to understand in order to invest the way Buffett and Munger invest. Their method requires deep knowledge of business analysis to invest in "wonderful businesses", so it's not for everyone. To each their calling and gifts. Depends on how you want to spend your days on this earth!

I follow more of the Peter Lynch style. You can diversify a lot, but you have to follow them closely. If you can't or don't have the time, then own fewer. It's what you can handle.

I just collected all my eggs to put in one basket. sweet upload mate !

@august4633

4 жыл бұрын

Well, if you’re 100% confident about an investment that’s the right thing to do. But you’re most likely not.

@znome8500

3 жыл бұрын

4 instead

@francisluglio6611

3 жыл бұрын

No one should be investing into only one business. Buffet just said to find 3.

@Brian-hd4rb

2 жыл бұрын

Me too😁 highly confident in my investment📈

“The high priest wouldn’t have any edge over the lay people and that doesn’t sell well.” So true

How old is this video?

Yes father I want to work online hard work I'm happy to work for you and father charlie

How come Berkshire Hathaway is more worth than it's stock contents?

STMP, PLTR, NET. My portfolio.

that totally makes sense.. if you know something will work put 100% of your money in it.why would you pick the second best and split it 50% 50% with the first.

@m.morininvestor9920

4 жыл бұрын

''I have only one stock...'' yeah but it's composed of hundreds of differents holdings ...

Who here doesn't diversify? I currently have only one stock in my portfolio. It's a bumpy ride but that's how you get big returns

@TylersRapPromo

Жыл бұрын

Is it a good tactic ?

I doubt that the right conclusion to draw here is that retail investors should not diversify. In fact, most financial managers cannot beat the S&P500 when you factor in their fees.

@mikederucki

Жыл бұрын

Buffett himself says that money bequeathed to his wife at his death will just be put 90% in SP500 and 10% TIPS

@Patrick-pv9pe

8 ай бұрын

Don't try to cap on Buffett's words. He said what he said. Cope.

cant believe i didnt realize this, fookin finance classes ruined me

@fatronjones

Жыл бұрын

Check out this idiots diversified portfolio lol Buffet is right en.wikipedia.org/wiki/List_of_assets_owned_by_Berkshire_Hathaway

Ray Dalio used to follow this strategy by making large concentrated bets which got him rich until he made one bet that wiped out nearly his whole net-worth. Now that he has rebuilt it from the ground up he recommends owning 10 highly or inversely related, diversified assets. Even the smartest investors make mistakes. I make large bets in undervalued index’s (ETFs) but never more than 20% of my total portfolio value. It’s funny how Warren talks down about diversification yet advises against leverage and holds a massive cash position. One can have a diversified portfolio reducing volatility and leverage up modestly to increase returns. When one asset goes up in price and the other goes down I can systematically rebalance my entire portfolio so I sell my highest gainer to buy the asset at a biggest loss. This not only locks in profits but puts the portfolio back to its risk tolerance, time horizon, and designated asset allocation.

Warren looks pretty young here

@dschafar6679

3 жыл бұрын

It depends, he's 28 in this video

Buffett vs Boogle

If you aren't Warren Buffett, maybe diversification is more along the lines of a famous Socrates quote, roughly "knowing thyself, is the beginning of wisdom". I don't think any average retail investor ought to stake their retirement on a handful of stocks they selected, no matter how intense the selection process.

Berkshire holds more than 90 different business

@tkproduction6996

Жыл бұрын

u dont have berkshire money either when u have 600 billion its a different game

@tkproduction6996

Жыл бұрын

then he said on a personal basis he has one stock

Agree

“High priests wouldn’t have any edge over the lay people and that never sells well”- well said

He had Coca Cola (KO) in 1996. That's when it started to peak... It only came back to that level in 2011. Listening to this in 1996 and buying KO would have made you wait for profit 15 years. Just saying.

@nickmarciano1629

2 жыл бұрын

But buying Berkshire you would have beat the market and basically every single tech stock that would boom for the next half decade after this speech

@nickmarciano1629

2 жыл бұрын

@BullShark this is in 1996, if you bought BRK the night of this speech you beat the market with it through today.

@alanrives6731

2 жыл бұрын

They bought Coke in 1988. Even buying it in 1996 you're factoring out stability and growing dividends

I love them

See I am a bit confused now. I read lots of book about stock trading and a lot of them do suggest the use of the method of diversification including Warren Buffets book. Is that because they're assuming the reader isnt advanced enough in stock trading? Another point is that here they were talking about diversification by buying 30-40 stocks from different businesses.. they didnt mention diversification with bonds and other assets that you could invest in. Anyone has an answer?

@scoobydoo3322

5 жыл бұрын

Most people are in fact, completely in the dark when it comes to stock trading or investing. Warren mentions the fact that all these theories about diversification is only going to get you to the same level as your "average Joe" in terms of portfolio performance. As for bonds or other assets, he did not mention anything. I couldn't answer you either as the only asset class I trade are stocks because that is what i absolutely love. Diversifying is greatly encouraged by the financial media platforms especially for your everyday average Joe with low risk tolerance. However, the media is also known to be the best contrarian indicator when it comes to information & accuracy. I suggest you go read Jesse Stine & Mark Minervini's work. You are going to notice that most if not all of the most successful stock investors don't diversify. Why? We'll take 2 scenarios : Let's say you find an absolute beast of a stock (both from a technical analysis & fundamental perspective). Scenario A : You risk 1000$ on that one stock. Scenario B : You actually find what you think are 5 stocks, all of them with massive growth potential. A : you make 10% return on that 1 stock. B : You risk 200$ on each of the 5 stocks. You make 10% return on every single one of them. In theory, you made the exact same return (in total) for each scenario. Here's the problem, believe me when i say, it will be a massive challenge and countless hours of research to find that one potential giant of a stock, let alone 5 of them. Even worse, your chances of making a great return on all of them is probably not in your favor unless you are a world class investor with massive experience. I do believe it is absolutely possible, but I know it takes massive amounts of time and passion. Most people lack that. That is also why I do not believe in diversification. If you invest a million dollars at once in a low cost index fund, and are able to make a fixed annual return of 8, 9 or even 10%, you are blessed with insane amounts of passive income. But you & I both know there is no "fixed" return & finding a fund with that consistant of a return is close to impossible as past results are not indicative of future performance. It continuously fluctuates. Plus, I am one of those individuals who can find great Joy in isolating myself behind my computer, researching & analysing data. But I am not an expert in any shape or form. I simply am fascinated by the dynamics of stocks.

@ameensh2439

5 жыл бұрын

@@scoobydoo3322 Thank you so much for your comment. First of all, when you said read for jesse stine and mark minervini did you mean books? Or what is it exactly I can read for them? I am trying to read all these important books so I can start stock trading (I only been studying it by reading haven't traded yet). Books like dhando investor by mohnish pabrai, warren buffet way, benjamin graham the intelligent investor, guy spier the education of value investing and there are more I recently bought for charlie munger and others.. Anyway about diversification.. not all but most of the books I read said that diversification is good to make sure you don't lose all your money.. and I think even Warren invested in bonds and index funds. Infact when he dies lots of his money will still be in index funds. I understand exactly what you mean by its easier to focus on a smaller number of funds but what do you think about when the market crashes? Would you still go with few stocks or would you diversify your portfolio?

@scoobydoo3322

5 жыл бұрын

@@ameensh2439 You have great questions. But answering them in details would take days XD I'll try my best. First, You can read Jesse Stine's "Insider Buy Superstocks". I absolutely love this book as Jesse focuses on having a "contrarian" mentality. He emphasizes the importance to think on your own and use the general sentiment of retail, financial media and smart money to help him make decisions. His book is raw. He talks about everything from insider and institutional activity and how they influence the movement of the market and he includes actual charts from his older trades to tell you how he thinks and why. Why he bought the stock, why he sold it and all the criteria he used to pick those stocks. Of course, I do not agree with all of it, but I can say with total confidence that the majority of his book is an absolute Gem! Although his book is better suited for more advanced investors than total beginners. Getting familiar with the terminology is probably the first thing you should do. Every time I read or heard a word I didn't know I googled it, sometimes even 3 or 4 times when I forget some definitions. I still have everything to learn. It never stops. Second, "diversification is good to make sure you don't lose all your money". I don't agree with this at all. The reality is, you are going to lose money whether you want it or not. It is a fact. There has never been a trader or an investor with 100% win ratio and no loses. It is just not possible because the stock market goes against human psychological traits such as greed, fear, hesitation, doubt, positive/negative response to an event & a multitude of others. That is why it is one of the most challenging game to master. It will show you your true colors. All your worst personality traits will come out and unless you learn to deal with them, it will be close to impossible to make money. But believe me, I am not trying to discourage you. If you truly have passion for it, continue exploring and lose yourself in the learning process. When you have sufficient capital, then make a plan and go from there. I realize this is a little bit vague but detailing everything would take forever XD. Step by step. Third, Even if you have never traded before, I suggest you start practicing and observing price action for different stocks as well as patterns. Patterns always repeat themselves over and over again and the more screen time you have, the better you get. This is not a one week thing neither is it a month worth of study. It takes years. But focus on day to day and have fun. Fourth, Whether the market crashes or not, it does not matter. What matters is how you react and what you do. you can sit on the side and wait for an opportunity or not do anything at all. easier said than done of course. However, you should know that some stocks completely ignore the direction of the overall market. They explode with momentum for various reasons even during a bear market. They are hard to find but I believe good stocks are a rare breed anyways. And by good stocks, I am not talking 10 or 20% in a year, I mean 100, 200, 500 or even 1000% in a few months. I personally trade low float NASDAQ stocks but they are risky. That is also the reason I love them. They are chaotic, they are manipulated and they are influenced by shady institutional and insider activity. That's what I love. That is also the reason a lot of people shy away from them. To each their own. For most people (who have no clue how to invest or trade) 5% a year on a 5000$ principle for 30 years is good enough as a return. But for me and others out there, 5% is a disgusting return especially when your mindset has changed and you always want to improve. And diversifying is simply not suited for people to make fortunes unless you start with a massive amount of capital (1 million+). The problem with diversification is that people do it because they don't wanna take the time to study the market. So they leave it to a stock broker or any another professional entity to be responsible for their personal portfolio. But the general population has access to the same stocks that these "professionals" do. Most people have no interest in the market. "It is gambling", "it is stupid", "It is a waste of money" and so on. Those statements are made out of ignorance or bad experiences. But it also leaves you clueless and completely weak in the face of individuals who, most of the time, do NOT have your best interests at heart. I found out the hard way. Finding people that can actually teach you and do it out of love for the craft is hard to find. I have yet to find that person. But if you are like me and you love it, early on you realize the importance of managing your own capital, but more specifically keeping it and growing it. That also takes years. But such is the reality and also the beauty of the stock market.

@RodrigoR9

5 жыл бұрын

The short answer is that the "average" investor isn't someone like you. If you average per dollar invested, the average investor is a big bank with dozens of analysts. You're likely not gonna beat them unless you're that big yourself. Hence Warren's advice to be average, unless you have the resources.

@ameensh2439

5 жыл бұрын

@@scoobydoo3322 Thank you for taking your time to answer my questions. I am very surprised that I never even heard of Jesse Stine! He literally produced a 14,972% returns within 28 months! That's outstanding!! I've never heard of such increase. I am reading about him and I put his book on to buy list I will read soon about the other guy you mentioned and see what he offers if he has any books. It actually makes lots of sense that if you have a capital of 1M+ as you said you counts diversify. As for small capitals it doesnt make sense. In fact I always thought, lets say I open up an account with $1000 how much am I supposed to put in index funds and bonds and how much in stocks? I used to be confused as it doesn't make sense to do so since my capital is so small. I actually been thinking about starting to trade the only problem with starting and basically what's stopping me are few things. 1) I need to find a good broker (not someone to invest for me) I mean more like a platform to use to invest and for that you have to look into a lot of things like fees and etc.. 2) The different types of stocks like you mentioned you like NASDAQ. See those confuse me because I need to understand what NASDAQ is and there are I believe ETA or w.e and so many more.. so I dont even know where to start haha that's why I'm still researching.

its really something howthis guy is so smooth... but heartless when itcomes to the unborn ... damn ...

Sam Bankman-Fried should watched this video when he was 8 or 10yrs old.

im buying para alongside mr. buffet

Diversify if your name isn't Warren Buffett.

I own six good stocks

@243wayne1

4 жыл бұрын

You're a fucking peasant.

I call Diversification as "Divorse"sification ~ Charlie Munger..

seen

The greatest,

a bit like throwing twenty darts at the board...some must stick.....

I learned to accept my ignorance:)

@francisluglio6611

3 жыл бұрын

That makes you just as smart at the guy that knows exactly what he's doing with 3 wonderful businesses

I agree with what he said however Berkshire hasn’t beat the s&p500 in over a decade so he might have changed his stance since

@xdman20005

4 жыл бұрын

Book value my man

@sausas8209

2 жыл бұрын

@@xdman20005 Jup, they have a lot of cash, and spend it timely. They're up +46% from 2020-present

Bueno pero cual es el problema. Si ellos lo bendieron y yo solo compre. Nadamas ellos tubieron la oortunidad de aserlo y no lo icieron ot falta de experiencia en los negocios

@tonyhaltmar1383

2 ай бұрын

WHAT??? 🤷🏻‍♂️🤦🏻‍♂️

If Fundamental Analysis = Macroeconomic Analysis, then Yield = Reflexivity = (Earnings / Price) ^ EPS Growth, That makes George Soros the best speculators in history. Note: To philosophers the sphere (the Reference drawing in Art) have land, labour, capital, and entrepreneurship.

:[ When I saw Carl's Jr increase their prices... Gone are the days of 85-cent chicken sandwiches.

Well when Wells Fargo went down, Buffett brought it to everyones attention, he sold and my one stock cut my income in half

Berkshire is diversified like crazy though. It looks ..walks...and ..talks like a mutual fund.

@DarkLordJmac

5 жыл бұрын

Diversified in financials

@HaruSakamoto

5 жыл бұрын

They only have dozens of stocks, where other funds have hundreds

@hannesproductions4302

5 жыл бұрын

fendermon they have been killing every total market index for the last 50years.

@spenser6353

5 жыл бұрын

@@hannesproductions4302 But Buffett recommends owning index funds

@fendermon

5 жыл бұрын

I fully agree. They are in a class of one. @@hannesproductions4302

ARMAGGEDON AMD+NVIDIA+ROLLS ROYCE+STAR ALLIANCE+BMC DIGITAL SIGNAGE= MO-BILLBOARD

@omppc

Жыл бұрын

🙆‍♀️👌🏌️‍♂️

Genius.

How many companies does Berkshire own? A lot.

@fatronjones

Жыл бұрын

en.wikipedia.org/wiki/List_of_assets_owned_by_Berkshire_Hathaway

power of knowledge dennison road bills college old stone tribal ridge

I own one stock 😂

I've been curious what hes been sippin' on in that purple can...Its cherry Coke....Okay...LoL!

@ronniedelahoussayechauvin6717

Жыл бұрын

Japan Trades👀

but the data shows that diversification can lower risk and at the same time increase the expected return. warren buffet is just a guy that was lucky to live in a time where you just bought a stock and it went up and up. seriously how can people trust warren buffet.

Top 3 stocks for 2021?

@gabrielnadar5985

3 жыл бұрын

Bad question, it's good companies which should remain good over the decades that should be the question.

@MrYega-zq7rz

3 жыл бұрын

@@gabrielnadar5985 Bad response. Pay off debt you slave.

@gabrielnadar5985

3 жыл бұрын

@@MrYega-zq7rz idiot ask your country pay their debt, you citizens of slave country.

But ahh...

someone thats not even talking via logic but living it i.e people always say school is useless in the real world may be speaking facts but no one cares but when someones is rich and successful you have no comeback yes its true munger graduated i think from havard (i don't know i'm not american) but he sooned realised people understanding business/vesting made his law degree look useless

LOL I think he just gave away that thevine stock he owns is coca cola hahahaha

@DenzelLN936

4 жыл бұрын

His only stock as he put it is Berkshire which he is a major shareholder of...

@news2hedz227

4 жыл бұрын

@@DenzelLN936 yes I realized that after I posted this message haha

@fredatlas4396

3 жыл бұрын

But it's true he's said Berkshire has held coca cola for many yrs, if you had enough savings you could have seen Buffet saying on many occasions what a wonderful company coca cola is and then waited patiently, maybe brought some and waited for the times when the stock went down significantly and topped up your holding over many yrs. But Warren says his holding period is forever, and most people may want or need to take some of that money

this is something i don't quite get. Warren and charlie munger keep talking about the negative impacts of diversification but yet Berkshire Hathaway is very diversified and holds a lot of different business that are from different industries.. They themselves practice diversification to a very large extent.

@Harihar_Patel

3 жыл бұрын

Not really, look at their top 5 holdings, close to 50% of their wealth is in them (of the securities portfolio).

@arvincabugnason6728

3 жыл бұрын

You don't diversify for diversification's sake. Diversification is an effect of analyzing a bunch of companies and listing down the best ones. Simply, you don't put a specific number of companies to invest, It just "happens" gradually as you analyze and find great companies.

1. Apple. 2. Amazon 3. ?

@AZNSLYR

4 жыл бұрын

Tesla

@sathyapranesh788

4 жыл бұрын

You are doomed if u have tesla

@Alex-qn9og

4 жыл бұрын

Overvalued. Think Wells Fargo or BOA

@AZNSLYR

4 жыл бұрын

Then, Im ok with being doomed.

@pbinsb3437

4 жыл бұрын

@@sathyapranesh788 Not doomed if you believe in what Elon Musk is all about. I'm really excited about owning a part of Tesla and I'm in it for the long haul. I bought more when the market went down in mid March.

here I am looking to invest in an ETF with over 3000 businesses because I don't know shit.

@dschafar6679

3 жыл бұрын

XD

@fatronjones

Жыл бұрын

@@dschafar6679 Check out this idiots diversified portfolio lol Buffet is right en.wikipedia.org/wiki/List_of_assets_owned_by_Berkshire_Hathaway 🤣🤣🤣

Twaddle😂🖤🎩🇺🇸

You can own stocks as much as child You have🤚

If he doesn't think diversification makes sense why does Berkshire own stake in over 300 companies? Is that why Berkshire has tralied the S&P 500 the last five years?

@justsee2010

4 жыл бұрын

if you dig more of his videos on youtube, he clearly explained the reason why Berkshire own stake in over that many companies...and the reason is clearly not diversification.

@m.morininvestor9920

4 жыл бұрын

@@stijnblom1 Time to buy sport cars then! 😂🤣😅

@Ophanim1000

2 жыл бұрын

Its because they have so much money that it cannot all be reinvested with good returns, besides they believe in a slow continuous investment over throwing lots of money in at once like a gambler.

@kendalljohnson9172

2 жыл бұрын

aaaand once again now we see buffett’s method has merits...but every so often people come and think the world has changed and it’s all upside down now and you can buy non-productive “assets” like bitcoin and gold and cash flows don’t matter...

Hilarious 🤣🤣

Only reason anything on Earth is still alive

Actions speak louder than words. Presently, Berkshire Hathaway has 49 different securities, including ETF's and holding companies. If it's so great to hold only 3, BRK.B would hold 3 or much closer to that number, more often than not.

@qillerr_yt

3 жыл бұрын

There's only so much businesses you can invest in

@avernvrey7422

3 жыл бұрын

BRK.A, B is the junk created to prevent hucksters from sullying the firm's reputation.

@627horsepowers

3 жыл бұрын

If they diversified early on they would not be as big as they are now. They were very focused early on gradually deversifying because of their size. Buffett admits that in other tube videos.

@somerandomperson3970

2 жыл бұрын

True True. Even in his partnership era, he indirectly said that he could invest in ~30 companies. Although, he used 3-4 strategies during that time. Buffett has done a good number of bad/meh investments that he doesn't talk about. Some of the more meh ones are Kaiser Aluminum, General Foods, R.J. Reynolds, Crum & Forster, Northwest Industries, Exxon (1980s), Beatrice Companies, Lear Siegler, McDonald's (1990s), Anheuser-Busch, Walmart (mid-2000s till sold), Johnson (mid-2000s till sold), Conoco Phillips, USG Corp, and US Bancorp. Some of the downright terrible ones are Aluminum Company, GATX Corporation (he probably lost around ~20% in this), Guinness PLC (probably almost a 20% loss), PNC Bank Corporation (also probably almost a 20% loss), and Tesco. I exclude the Sinclair Service Station one since, AFAIK, competent investors made that sort of mistake when they're young: They got lucky, overly confident in themselves, make one big mistake, reflect, become "great". Ray Dalio said something like this, I think.

@somerandomperson3970

2 жыл бұрын

Actions speak louder than words is right.

何晶，投资赚到的钱，要能运回国使用，哪才是你的钱，不能运会过使用是帮别的国家丰富其经济，Miem 赚的，只要你们付我屋租，就能把钱拿走，我不是吸血鬼，不会吸着别人的钱不放。 😂😂😂

Diworsification.

what???? in other words = I HATE DIVERSIFICATION, I OWN ONLY ONE STOCK = S&P500!!! HAHAHAAHAHAHAHA