"If only one variable is key to a decision, and the variable has a 90% chance of going your way, the chance for a successful outcome is obviously 90%. But if ten independent variables need to break favorably for a successful result, and each has a 90% probability of success, the likelihood of having a winner is only 35%." -- Warren Buffett, Letter To Shareholders, Berkshire Hathaway Inc., 2004.Note: Given the chance, will you bet for the of winning with probability of 0.9 or 0.35? Put all the eggs in a basket after you study throughly realiability of the basket is always better than distribute the eggs into 10 different baskets without making a throughly studies. The more baskets, the harder you hold the basket and care for the eggs inside. "Diversification is the protection against igrorance."
1 comment:
I have learned that if I pick the stock, there is a 90% chance of failure. So I pick the stock that I like least and it has worked out well for me.
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