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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (41263)2/5/2011 9:22:19 AM
From: Madharry  Read Replies (1) of 78625
 
the problems with being concentrated is the it increases your exposure to fraud, which is very difficult to control, and force majeure- weather and political events are difficult to predict. On top of that it inreases your volatility and most inexperienced investor and many experienced ones panic when they see their portfolios dropping 30-40-50% or more. I vividly remember seing a video of buffet and munger talking about how the price of Berkshire hathaway dropped over 40% 4 times in the 25 years they had been a public company.
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