STREET DOGS
MICHEL PIREU: Diversification involves following a rule
Success requires the conviction to concentrate your portfolio in your very best ideas and the common sense to nevertheless diversify your holdings. — Seth Klarman From Lee Brodie at CNBC: Jim Cramer, the "Mad Money" host, believes the key to success in the stock market involves discipline. And he believes no discipline is more important than diversification. "This is the single most important concept in investing," Cramer says. "It’s the key to avoiding enormous losses and making sure you can weather a storm … the idea behind diversification is critical whether you own 5 stocks or 500. That is, diversification spreads out risk and therefore helps shareholders mitigate all kinds of developments, especially unexpected and negative developments. "When you get too concentrated in one area, should something bad happen, you’re going to want to throw yourself off a bridge because the losses will be enormous," Cramer says. "However, if your portfolio is properly diversified, you can handle ...
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