Be focused and buy concentrated portfolios – they perform better. Buying two stocks in every sector will help you create a zoo not a portfolio. A person who diversifies is the one who is unsure of his investments. Buffet once put about half of his wealth in a single stock “American Express” when he believed that the company was into a one off problem.
Buy what you see and understand. Buffet never bought a single technology company in spite of being a very good friend of Bill Gates.
Buy businesses not stocks. Buffet advocates investors to be and think like passive a owner of that business.
Understand the Margin of Safety and the Circle of competence.
These are Buffet's favourite words. Do not be a jack-of-all-trades buy stocks of businesses that you understand.
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