“Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing can be wonderful.’”
Warren is famous for highly concentrated stock positions, and he is willing to keep adding to those positions as long as the economics of the business are there and the price is right. Sometimes he will build a large position over a number of years, as he did with Coca-Cola. This is contrary to the strategy of diversifying risk, also known as not putting all your eggs in one basket. Warren has always believed that if you diversify just for the sake of diversity, you will end up with a menagerie for a portfolio, never really understanding any of the businesses in which your money is invested. He would rather think long and hard about what basket he is putting his money into, then once he puts it in, he’ll watch that basket like a hawk.