We’ll talk about diversification, Warren Buffett’s famous Berkshire Hathaway portfolio, as well as the academic study that thought it had this question answered only later to be challenged. Some people only have a handful, some people use funds to hold hundreds and hundreds. In this video, we will weigh up the opportunity cost of diversification against the advantages of spreading your bets. 0:00 – Intro
1:47 – The Birthday Paradox
4:19 – Downside to diversification
5:50 – Buying the haystack
6:53 – Allocate your capital according to your conviction Some interesting links and further reading on the topic: ‘Some Studies of Variability of Returns on Investments in Common Stocks’ by Lawrence Fisher and James Lorie – https://www.jstor.org/stable/2352105 ‘The Illusion of Diversification: The Myth of the 30 Stock Portfolio’ – https://www.investopedia.com/articles/stocks/11/illusion-of-diversification.asp Оur Investing 101 series will cover the fundamentals of investing and will try to bring you the basics to build a solid foundation. Let us know in the comments about future topics you would like to see covered in these videos. Visit us at https://trading212.com Download our free mobile apps for iOS or Android:
https://trading212.com/GetTheApp Tom's personal YouTube channel: https://www.youtube.com/c/thatfinanceshow #Stocks #Investing #Investing101 #Trading212 #Trading #equities As with all investments, your capital is at risk. Investments can rise and fall, and you may get back less than you invested.

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