Warren Buffett said it best “diversification is protection against ignorance. It makes little sense if you know what you are doing.” Returns in investing follow a power law distribution https://en.wikipedia.org/wiki/Power_law A good model to review is angel or venture capital funds. These typically have a 10 year lifespan to allow for successful exits and for non-linear compounding to take place. Venture capital returns are hugely unevenly distributed, as summed up by Peter Thiel in Zero to One.
Going with your best ideas
Going with your best ideas
Going with your best ideas
Warren Buffett said it best “diversification is protection against ignorance. It makes little sense if you know what you are doing.” Returns in investing follow a power law distribution https://en.wikipedia.org/wiki/Power_law A good model to review is angel or venture capital funds. These typically have a 10 year lifespan to allow for successful exits and for non-linear compounding to take place. Venture capital returns are hugely unevenly distributed, as summed up by Peter Thiel in Zero to One.