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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: mauser96 who wrote (2389)6/1/1999 2:28:00 PM
From: Tlac  Read Replies (2) of 54805
 
Sometimes the stock market prices are discontinuous- on sufficiently bad news a stock can go directly from 40 to 20, with no way to sell between the two prices. This is one of the prime reasons for diversification at least between companies

Lucius,

My feeling is that it is not diversification of one's portfolio that will protect against permanent drops of this magnitude, but rather, concentration in Gorilla stocks, i.e. ones which, by definition, will not endure such a decline for very long.

Lest we forget, "Diversifcation is a hedge against ignorance." WB

Kelly
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