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To the readers of the topic. In my humble opinion, diversification for plebs like us is a bad investment strategy. VERY bad in fact. Why? Because we don't have the same amount of capital as Warren Buffett to make it effective. If their $1 billion invested makes 20% in one year, that's $200,000,000. I believe that's more than enough especially if they outperformed the S&P 500 index.
Plus we don't need the hedge to reduce volatility because we are not asset managers who manage OTHER people's money. For us, we concentrate to one or two investments, if we want to truly make an amount of money that matters.
I mostly agree with you Wind_FURY -
even though I have my doubts about whether you got this right since you are continuing to make this argument about "different rules applying to poor people".. which is not completely wrong, even though you tend to emphasize it so much that contributes to flaws in your emphasis of such.
In other words, there likely tends to be more value in diversification as your investment/savings portfolio grows, and at what point some diversification is good is going to have quite a few discretionary aspects that lead us back to figuring out which goals the investor is trying to achieve in terms of growth of wealth versus preservation of wealth balances.
Even if you might presume that everyone wants to get rich, there are some trade-offs that some people might be willing to make and others prefer not to make those kinds of trade-offs.
And surely there tends to be a decent amount of truth that concentration of investments are likely to contribute to greater potential for growth, yet again, some people are not willing to take those kinds of concentration of investment risks that likely end up in too much volatility, including that they might already know that they are going to need access to some of their wealth in various short term periods, and they cannot be taking the risk that their one or two investments happen to be down 60% to 85% at the time that they are considering tapping into it, so in that sense it may well be better to be able to draw from some assets that are more stable, even if they might not grow very well, but if you don't have any of those kinds of assets, then you are forced to have to spend from the asset that is 60% to 85% down.
So, there is some value in terms of when to start to diversify your savings/investment in bitcoin beyond bitcoin and cash and maybe into some other assets, and if you stick only with bitcoin and cash, then you can sometimes play around with those two and find enough comfort .. but I have my doubts.. .. even though there are people who maintain very concentrated approaches towards what they are investing/saving in... and for sure, they have the right to do that to themselves... even if such concentration of wealth may well not be good practices for the vast majority of normies.. even supposedly poor plebs like uie-pooie.
It's not because someone is, to use your word, "poor" that different rules apply to him. What I said was the difference in the amount of capital. If an investor has $100,000,000, he can diversify it to 50 different investments and make 30% out of his capital in one year, the gain would be $30,000,000, which is very good. In contrast, if a pleb who has a savings of $10,000 uses the same diversification strategy would profit only $3,000 for the year, which is also not bad, BUT barely life-changing.
Plus I researched how Warren Buffett diversifies his investments as an asset manager and I am Flabbergasted in what I learned.