Comments on: Review of Seminar - Session 1

By: Dave

Dave — Fri, 04 Nov 2005 01:29:14 +0000

“one need not over diversify his stock holdings (of his stock portfolio) if he knows what he is doing. And how many investors do?”

Well said.

By: Martin Lee

Martin Lee — Tue, 01 Nov 2005 01:48:00 +0000

Agreed. It is always good to have a diversified portfolio rather than just holding stock. Even though Warren invested in mainly stock when he started out, not everyone is Warren Buffett!

Of recent years, he has been holding on to more cash. Even he finds it difficult to find good buys in today's market.

Anyway, my point is, one need not over diversify his stock holdings (of his stock portfolio) if he knows what he is doing. And how many investors do? :)

By: Dave

Dave — Mon, 31 Oct 2005 18:37:19 +0000

True, but Berkshire Hathaway is not just a stock portfolio. It is a company with many subsidiaries, as well as some long-term investments in bonds and stocks. I couldn’t easily figure out what fraction of its holdings are in common stock.

I wouldn’t try to copy Warren Buffet’s asset allocation unless you know what you are doing.

By: Martin Lee

Martin Lee — Mon, 31 Oct 2005 11:21:54 +0000

Hi David,

thanks for pointing out my slight inaccuracy.

I left out an important word 'stock'.

What I meant to say was that if you look at the stock portfolio of Berkshire, you will find that 5 stocks make up 70% of the entire stock portfolio.

If you look at the market values of the top 5 holdings in the 2004 annual report, the number works out to be 70.9%.

By: Dave

Dave — Sun, 30 Oct 2005 23:08:47 +0000

“The portfolio of Berkshire consists of 5 stocks that make up some 70% of the entire portfolio.”

You better check your facts there Martin. Berkshire Hathaway’s annual reports are all publically available, and I think if you do your research you will find you are wrong.