Warren Buffett: Overdiversifying – The Noah School Of Investing
The addition of the one hundredth stock simply can’t reduce the potential variance in portfolio performance sufficiently to compensate for the negative effect its inclusion has on the overall portfolio expectation.
Also, the lower will be the expected results, assuming different choices have different expectations of performance.
While this means our results will bounce around more, I think it also means that our long-term margin of superiority should be greater.