Curious what people think about diversification - specifically how many companies can one effectively follow and still be protected against concentration of risk if it isn't a full-time job? My approach to investing is not very quantitative - I buy companies that lead in their sectors (or are well-respected) with great management, steady profits, and good reputations. Buy low, sell high, but not very often. I see myself as an investor not a trader. The companies grow, so does my wealth. Extra cash (always) sits in laddered muni bonds and high yield savings accounts. Very basic, pretty low risk.

I have about 20 companies in my portfolio, and that number has crept upwards the last few years as I have added in new sectors (i.e., tech and pharma) and kept most of what I had before, including a chunk of B's acquired in the Gen Re deal (lucky day for me!) Even though I like what I own, I do like to follow my companies, and I do need to be able to value them or else I don't know when to buy or sell. I don't need to be precise, I just need to be roughly right. But still, it takes time, and I have a day job and a family that are my priorities.

There is now so much data and news to be digested on each company, and the markets move so much faster, I have started to wonder if I own too many stocks rather than too few. It is my own money so I don't have to put in more effort than I want to. And unlike Jim, I don't spend my free time working on spreadsheets lol. I have added to my BRK along the way (2020 @161, 2022 @271) and it is my biggest single holding, so that provides a measure of safety and diversification, but even BRK takes time to follow (not counting the time I spend lurking here, which is considerable.)

My question for my fellow travelers here is: how any stocks do you have in your portfolios, and how carefully do you follow them? And as a follow-up, how often do you trade?

abromber

"Nobody else has my view. It doesn't bother me. I just think they're all wrong.' Charlie Munger 30 Apr 2022