To: Jim Fitzgerald who wrote (7761 ) 8/29/1998 8:28:00 PM From: leisuresports Read Replies (3) | Respond to
Jim, while I do not know the details of your financial situation, I think it is wrong for people to rush to the judgement that you are either being foolish or gambling by taking the big position in a single company that you have. The comparison with putting the money on the craps table or whatever it was is stupid - you have purchased a piece of a company which you believe is extremely undervalued, which has proven management, an excellent track record, very good prospects for the future, and a company that you know more about than more than 99.99% of the investing public. Is it not clear to Professor Harvey that purchasing a piece of a company is quite a bit different than betting on the flip of a coin? Obviously your portfolio is not as diversified as it was, but diversifying just to be diversified is meaningless - you could be diversified in many different companies (perhaps Cendant), in many different markets (say Russia, Latin America), some commodities (perhaps some gold?) and you would be diversified and in financial ruin. There is nothing wrong with taking a big bet on something that you believe in strongly. A lot of other issues need to be considered - the size of your portfolio, your future earnings potential, your age, your investment goals, and your other assets that are not in the market. As far as I know, the people who have mocked you are not aware of these factors and without that knowledge I find their criticism unfounded. That being said, you obviously realize that putting all of your portfolio in just one company IS risky but you apparently have balanced the risks and rewards as they apply to your situation and have made your decision. Good luck.
