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Green Stocks |
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Rule #1 - Do not lose money! Rule #2 - Never forget rule number 1! ( by: Warren Buffet )For comments or questions please email: : admin@equityresearch.com |
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50 Hottest StocksThis link exists to reiterate our investment style. It is much easier to make one or two good decisions than to make 50 good decisions. According to top investors like Warren Buffet and Seth Klarman, you should only look at around 5-10 stocks (50 is too many). What about diversification?Diversification is a myth. Would a farmer sprinkle a few weed seeds in with his crop seeds for diversity? The only way diversification makes sense is when the farmer doesn't know if he is holding a crop seed or a weed seed. In that case, he should put a little of everything in there because that way he is bound to get a few crop seeds. If you have no idea what kind of seed you are holding, than what kind of farmer are you? With investing, we are like the farmer. We are going to plant a few crops and we better well know what we are doing. If we don't, we shouldn't be farming. We should buy produce from the supermarket at higher prices. The supermarket is akin to a mutual fund. You pay more for someone else that knows about the seeds, but since the farm economies of scale work in reverse as mathematical probabilities shrink the farmers crops are not fully abundant. Suppose you are a great farmer. Would it be easier to double the size of a one acre farm or to double the size of a one million acre farm? The smaller farm is much easier to grow. In the world, there are lots of small investors that do not know what they are doing. In fact research shows that the average small investor is mostly wrong in what investments they make. The sad thing is that these people have a huge advantage in the market. They simply need to do their homework rigorously. So, where are the fifty hottest stocks. We don't have them here. We don't think it makes sense. If you go that big, you might as well buy a mutual fund. |
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