Diversified versus focused approach to investing

[CityFarmer]

I believe the value investing philosophy is more important than the question of to diversify or not to diversify. It is really up to individual preference, time and investible money and e.t.c. There are people who has succeeded with a diversified portfolio as well:

Walter Schloss is known to always hold at least 50-100 stocks in his portfolio as he don't want to handle the stress coming from 1 particular stock. Neither will he ever talk to management as all he cares about is the financial numbers and the price he can pay for them. Since he don't care much about the business, it is easy for him to hold so many stocks. His return was 16% over 46 years compared to 10% for benchmark.

Cheah Cheng Hye of Value Partner used to go for concentrated approach, but has changed to diversified portfolio after he realised that there are just too many crooks that are great actors.

shanrui, i assume the info is from book "The value investors" by Ronald W. Chan. I am reading it now.

Yes, diversify among selected value stocks, if done right, is a feasible investment strategy.

The Walter Schloss's strategy allows him stress-free, but it comes with a cost i.e. lesser return. His return is definitely lower than WB's focus approach. Well you got what you paid, and he chose the one most suit him.