Tomato says Peter Lynch calls it 'de-worse-ification' -g- ... I still have mixed feelings about the merits of diversification, but in general the increased access to information since getting this computer three years ago has led me to hold less and better stocks, to follow them more closely, and to be much better informed on them. So by that action i guess i'm agreeing with the O'Neil quote - logically, a perfect situation where an investor could know all relevant facts and be able to completely understand their effects would lead him directly to identifying the best of the best, the Numero Uno leader of the time period selected, and of course that is the only one he would buy.
But as human beans we are fallible, we're all ignorant to varying degrees on various subjects. The more ignorant we feel, the more hedge we feel we need. I guess i feel 47% ignorant, because only 53% of what i have in stocks right now is in jdx. There are other factors, like a tendency to hang onto free shares of those stocks who've treated me well, and a tendency to always be looking for something new ... but yes, O'Neil is right, i don't put it all in one basket partly in case i'm wrong, or as is more often the case, i'm being right too early, which equates in the short term to being wrong.
More and more, though, i'm leaning toward less and better stocks ... getting quicker on dumping non-performers, asking myself 'would i buy this again today' and 'if not, then why am i holding it' ... on the buy/hold/sell spectrum, the 'hold' category just keeps getting narrower, a trend the brokers likely appreciate greatly -g- .... cheers |
