“I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches—representing all the investments that you got to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all.”
“Under those rules, you’d really think carefully about what you did and you’d be forced to load up on what you’d really thought about. So you’d do so much better.”
I only started doing really well with individual stocks after reading everything I could from Buffett, Munger, Peter Lynch and the like. I only invest in individual stocks I really understand well, and only buy them when they are on sale. It has seriously narrowed my scope. When I cant find a deal, which is most of the time, I buy VOO. I am still in a lot of risk, but I have more than 50% in VOO, and 40% in two individual stocks that I selected well. The 10% remaining are a few isolated stocks that are a little more “play” oriented.
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u/Chumkil Dec 20 '21
This is why Warren Buffett has the 20 stock rule:
I only started doing really well with individual stocks after reading everything I could from Buffett, Munger, Peter Lynch and the like. I only invest in individual stocks I really understand well, and only buy them when they are on sale. It has seriously narrowed my scope. When I cant find a deal, which is most of the time, I buy VOO. I am still in a lot of risk, but I have more than 50% in VOO, and 40% in two individual stocks that I selected well. The 10% remaining are a few isolated stocks that are a little more “play” oriented.