Comments on: The Advantages of Keeping Your Eggs In One Basket http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/ Wise Choices. Improved Finances. A Better Life. Mon, 15 Mar 2010 21:36:41 -0600 http://wordpress.org/?v=2.9.2 hourly 1 By: Ron http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1373 Ron Mon, 07 Apr 2008 05:14:58 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1373 And you're exactly right. What gets to me is that the homework isn't all that difficult! The amount of information that's available to help you evaluate a company today is staggering. Just 15 years ago, you had to send off for snail mail copies of annual reports, research Value Line at the library, and rely on brokers who did everything in their power (some still do) to get you to think that investing is too difficult for Joe Average. I'd rather do the homework and end up with my 15-20% average annual returns... And you’re exactly right. What gets to me is that the homework isn’t all that difficult! The amount of information that’s available to help you evaluate a company today is staggering. Just 15 years ago, you had to send off for snail mail copies of annual reports, research Value Line at the library, and rely on brokers who did everything in their power (some still do) to get you to think that investing is too difficult for Joe Average.

I’d rather do the homework and end up with my 15-20% average annual returns…

]]> By: Four Pillars http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1375 Four Pillars Sun, 06 Apr 2008 19:48:06 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1375 You guys are making the assumption that all investors believe in active management. I'm a huge believer in passive investing because I truly don't believe that anyone can outperform the market with individual stocks. Needless to say, if you are a passive investor then diversification is one of the key strategies. Mike You guys are making the assumption that all investors believe in active management. I’m a huge believer in passive investing because I truly don’t believe that anyone can outperform the market with individual stocks.

Needless to say, if you are a passive investor then diversification is one of the key strategies.

Mike

]]> By: dividenddollar http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1370 dividenddollar Sun, 06 Apr 2008 16:29:59 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1370 I agree with this kind of thinking. As long as you are willing to do your homework, then putting all your eggs in one basket is the right way to go. Like Four Pillars said though, most people aren't willing to focus and do the homework necessary. For them, a diversified portfolio of investments would be better. I agree with this kind of thinking. As long as you are willing to do your homework, then putting all your eggs in one basket is the right way to go. Like Four Pillars said though, most people aren’t willing to focus and do the homework necessary. For them, a diversified portfolio of investments would be better.

]]> By: Top Referrers and Some Good Reading http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1360 Top Referrers and Some Good Reading Sun, 06 Apr 2008 09:01:18 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1360 [...] Wisdom Journal says it’s ok to have all your eggs in one basket. Excellent blog by the [...] [...] Wisdom Journal says it’s ok to have all your eggs in one basket. Excellent blog by the [...]

]]> By: Ron http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1238 Ron Tue, 01 Apr 2008 01:56:24 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1238 @Four Pillars: He "takes care of that basket" doesn't he? I think if you're a stock "trader" you better be invested in a diverse field, but if you're a real investor, a fundamentals and value kind of investor, you can concentrate on those industries and companies you know and understand without spreading yourself too thin in order to maximize your returns. Buffet has averaged 23%. Now if I could only afford ONE share of Berkshire Hathaway..... @Four Pillars:
He “takes care of that basket” doesn’t he? I think if you’re a stock “trader” you better be invested in a diverse field, but if you’re a real investor, a fundamentals and value kind of investor, you can concentrate on those industries and companies you know and understand without spreading yourself too thin in order to maximize your returns. Buffet has averaged 23%. Now if I could only afford ONE share of Berkshire Hathaway…..

]]> By: Ron http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1233 Ron Mon, 31 Mar 2008 23:59:50 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1233 @Four Pillars: Ah, but you do agree with me. Reference your second sentence. Focus. If you can take care of "that basket" it is okay to keep your eggs there. But that's a big IF. Most people, like you say, are ADHD investors....wait a minute, that sounds like a great post title! :D (and if someone isn't going to learn how to properly value a public company, yes, diversification is better) @Four Pillars:
Ah, but you do agree with me. Reference your second sentence. Focus. If you can take care of “that basket” it is okay to keep your eggs there. But that’s a big IF. Most people, like you say, are ADHD investors….wait a minute, that sounds like a great post title! :D

(and if someone isn’t going to learn how to properly value a public company, yes, diversification is better)

]]> By: Four Pillars http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1237 Four Pillars Mon, 31 Mar 2008 20:25:25 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1237 I guess I do agree with you.. One other thing about Buffet - he doesn't just buy the stocks - he can control the companies as well and get great access to the inner workings of the companies he is interested in. Mike I guess I do agree with you..

One other thing about Buffet – he doesn’t just buy the stocks – he can control the companies as well and get great access to the inner workings of the companies he is interested in.

Mike

]]> By: Four Pillars http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1232 Four Pillars Mon, 31 Mar 2008 18:57:42 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1232 I disagree with the general post. Buffet is always used as the "anti-diversification" example because quite frankly he is the poster child for not diversifying. However - most equity investors don't have any focus, ie they probably don't spend much time analyzing their investments so for them I think diversification is better. As you mention, someone starting a business has to focus and put most if not all their $$ into the business because otherwise there wouldn't be a business. The same thing could be said of buying a house - I always read how you "shouldn't" have more than n% of your $$ in your house which is a crock. Unless you are old and stinking rich your house will always have a significant portion of your portfolio. Mike I disagree with the general post. Buffet is always used as the “anti-diversification” example because quite frankly he is the poster child for not diversifying.

However – most equity investors don’t have any focus, ie they probably don’t spend much time analyzing their investments so for them I think diversification is better.

As you mention, someone starting a business has to focus and put most if not all their $$ into the business because otherwise there wouldn’t be a business. The same thing could be said of buying a house – I always read how you “shouldn’t” have more than n% of your $$ in your house which is a crock. Unless you are old and stinking rich your house will always have a significant portion of your portfolio.

Mike

]]> By: Remodeling This Life » Weekly Roundup http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1210 Remodeling This Life » Weekly Roundup Sun, 30 Mar 2008 11:59:52 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1210 [...] The Advantages of Keeping Your Eggs in One Basket at The Wisdom Journal. I love this post so much. I even made hubby read it. It’s really true, for us, and when I think about it many things in life to just focus on one thing and do it really well instead of all this half-hearted spreading around of energy. I guess you could say that our home is our basket at this point in our life. We work hard at it and focus on it and that’ll inevitably bring great things for us. [...] [...] The Advantages of Keeping Your Eggs in One Basket at The Wisdom Journal. I love this post so much. I even made hubby read it. It’s really true, for us, and when I think about it many things in life to just focus on one thing and do it really well instead of all this half-hearted spreading around of energy. I guess you could say that our home is our basket at this point in our life. We work hard at it and focus on it and that’ll inevitably bring great things for us. [...]

]]> By: Frugal Dad http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/comment-page-1/#comment-1176 Frugal Dad Thu, 27 Mar 2008 17:57:53 +0000 http://www.thewisdomjournal.com/Blog/the-advantages-of-keeping-your-eggs-in-one-basket/#comment-1176 Ron, I agree wholeheartedly with your recommendations as it seems many have bought too far into the diversification route, spreading themselves so thin they begin to lose track of what they are invested in. There is a lot to be said for a more narrowed approach with established limits on when to ring the register and when to move on. Ron, I agree wholeheartedly with your recommendations as it seems many have bought too far into the diversification route, spreading themselves so thin they begin to lose track of what they are invested in. There is a lot to be said for a more narrowed approach with established limits on when to ring the register and when to move on.

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