Why Diversification Results In Mediocrity
As Warren Buffett put it, “The five most dangerous words in business are ‘Everybody else is doing it.’” This monkey see, monkey do approach creates a race to the exceedingly crowded center—even though there’s far less competition on the edges.
Ozan Varol • Think Like a Rocket Scientist: Simple Strategies You Can Use to Make Giant Leaps in Work and Life
While there is unquestionably some truth to the idea that the world is often too random to literally make just one bet, the widely held assumption that diversification is a free lunch is just plain wrong. Just as there is benefit to be derived from diversification with respect to risk, there is a cost, too — that of losing whatever edge you might h... See more
Mike Speiser • Why Diversification Results In Mediocrity
An entrepreneur cannot “diversify” herself: you cannot run dozens of companies at the same time and then hope that one of them works out well. Less obvious but just as important, an individual cannot diversify his own life by keeping dozens of equally possible careers in ready reserve.
Peter Thiel, Blake Masters • Zero to One
However, there is a common denominator among this group: rather than just taking risks, as is commonly assumed, they excel at judging, minimizing, and controlling risks.
Brendan Moynihan • What I Learned Losing A Million Dollars
The more you diversify, the less you know about any one area. Many investors overdiversify. The best results are usually achieved through concentration, by putting your eggs in a few baskets that you know well and watching them very carefully.
William J. O'Neil • How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition
