If you are not a professional investor, if your goal is not to manage money in such a way to get signifigantly better return than the rest of the world, then I believe in extreme diversification. I believe that maybe 98, 99 or maybe more than 99 percent of people who invest should extensively diversifiy and not trade. So that leads them to an index fund type of decision with very low cost. Because all they are going to do is own a part of America and they have made a decision that owning part of America is worth while. I don’t quarel with that at all and that is the way they should approach it… Unless they want to bring an intensity to the game and make a decision to start evaluating businesses. Once your in the business of evaluating businesses and you decide that you are going to bring the effort and intensity… and time involved to get that job done, Then I think that diversification is a terrible mistake…

If you really know businesses you probably shouldn’t own more than six of them, if you can identify six wonderfull businesses , that is all the diversification you need. You are going to make alot of money and I guarantee you that going into a 7th one instead of putting more money into your first one has got to be a terrible mistake. Very few people have gotten rich on their 7th best idea, but alot of people have gotten rich on their best idea.

But to quote Buffett again…

A public-opinion poll is no substitute for thought.

Regardless of what experts or friends say. Ultimately you have to decide whats best for you. You are the one that has to sleep at night with your investment decisions.