- quote -

Yes, but the 30 individual companies you have in that particular index
fund may be all large cap, or all value, or all small or all domestic,
or whatever (depending on the index you have). You would need to get
a total stock/bond domestic/international index fund to capture some
of all categories. 30 companiesis not enough, I'm sure. Here's an
analogy--you might want to diversify your wardrobe so you buy 30
different colors and styles of shirts. But they are still all shirts,
right? No pants or socks or anything else.

SandyBeth

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Hi Bread,
BreadWithSpam[at]fractious.net schrieb:
- quote -

I only have ONE fund (and it's a index fund)in my portfilio.
I guess some people would say it's well diversified. (it contains 30
companies)

on the other hand when I see other people with with 15 (and more)funds
in their portfilio) and would say I have no diversification.

I beleive Buffet is right when he says
“Diversification is insurance against one’s own ignorance”
and
“Wide diversification is only required when investors do not understand
what they are doing.”


CU
John

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Turtle <mhauser-rite-on[at]arcor.de> writes:

- quote -

I think you're not getting the full picture if you think
that Buffett doesn't think well of diversification.
He believes in moderating risk - and for those who
don't understand investments as well as he does,
diversification *is* how to do that.

(Twain said "Put all your eggs in the one basket --
and watch that basket!". That's basically what
Buffett says, except that he recognizes that not
everyone actually *can* "watch that basket" - either
through ignorance, lack of skill or lack of time.)

Buffett's been recommending index funds for the rest
of us for a very long time, once again as recently
as a few weeks ago:

http://seekingalpha.com/article/7556...uy-index-funds

or, perhaps better, here:
http://www.indexuniverse.com/blog/31...dex-funds.html

Note the comment by Jeff Ptak of Morningstar on there:

"I was at the meeting and 'just buy index funds' is an incomplete
characterization of what Buffett said. Essentially, he divided the
investing world into two camps--those who are willing/able to do the
work necessary to spot mispricings and capitalize upon them and
those who aren't. He advocated index funds for that second group. He
didn't prescribe indexing as a blanket formula for all investors to
follow. "

And here's another quote from an interview with Buffett
just after the BRK annual meeting:

<http://www.marketwatch.com/news/stor...B7E303003D4%7D
Buffett reiterated his view that for most small investors who don't
have time to research individual companies, cheap index funds are
the best way to invest in the stock market.

"The best way in my view is to just buy a low-cost index fund and
keep buying it regularly over time, because you'll be buying into a
wonderful industry, which in effect is all of American industry,"
Buffett told CNBC anchor Liz Claman.

This latter quote emphasizing (a) low-costs and (b) diversification.

That Del Walmsley blog entry is completely misleading and,
in fact, claims a quote from Buffett that as far as I know,
he's never actually said. If that's indicative of the quality
of his writing and research, I'd look elsewhere. Of course,
he's really just pushing his "Lifestyles Unlimited" seminars
and membership for real estate investors, not actual long-term
financial planning.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

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Hello everybody,

and what do you all thinks of his ideals toward diversification?
http://delwalmsley.org/slog080519.aspx

CU
John


======================================= MODERATOR'S COMMENT:
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On May 28, 9:05*am, "Mark Freeland" <nNeE...[at]nyc.rr.com> wrote:

- quote -

I think Daniel was referring to John Stuart Mill’s concept of "homo
economicus" and/or Adam Smith's "invisible hand" metaphor from Wealth
of Nations.

In essence, a rational capitalist will act in his own best interest
and by doing so will inadvertently act in the best interest of society
as a whole. The simplest example is that a seller ordinarily tries to
get the highest price for his good or service and a buyer tries to pay
the lowest. The end result is a market equilibrium price. Real life
tends to be much more complex, however.

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"Mark Freeland" <nNeEwTs[at]nyc.rr.com> wrote:
- quote -

Because he is one of those few who are in a position to *make* the
future with his words. That is the point the OP was trying to make.

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"Daniel T." <daniel_t[at]earthlink.net> wrote in message
news:daniel_t-6D6CA9.20192627052008[at]earthlink.vsrv-sjc.supernews.net...
- quote -

How do you know that it isn't the other way around? He speaks the truth (or
at least his perception of it) and invests accordingly, just as any good
capitalist would. That would make the coinciding of statement and truth
nothing more than the result of good observation skills (which one expects
of a good investor).

Hence the saying: put your money where your mouth is.

Mark Freeland
nNeEwTs[at]nyc.rr.com

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PeterL <po.ning[at]gmail.com> wrote:
- quote -

Nonsense, he says what is in his best interest, like any good capitalist
would. If it happens also to be the truth... Well that's just a happy
coincidence.

Frankly, dire predictions of the future cannot be called either true or
false in my opinion.

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On May 27, 5:16*am, "W. Wells" <ot...[at]nc.rr.com> wrote:
- quote -


The truth hurts. Buffett can never run for office because he tells
the truth.


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Buffett is doing his part to talk the economy down. In Germany he's saying
the American economy is going deeper and longer in recession.

This all works out for him to get prices down but he does it at the cost of
the rest of us.

I used to like him but since he has become a socialist I for one am sick of
this publicity seeking jerk. That goes for Greenspan too. Now I feel
better.


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