Too Much Diversification Can Hurt You...Even top funds can not keep up with elite leaders in the markets! We use the composite ratings that a Young Warren Buffett would have used to select a few stocks that are out performing the market. Diversification --- a staple of investing --- is overrated. Let us explain why!
HOW YOU THINK IS EVERYTHING: Always be positive. Think success, not failure. Be aware of a negative environment. So let's consider a dose of optimism, wisdom and insight: the basics as taught by that perennial investing Yoda, Warren Buffett. Warren knows the real world. He knows that over a forty or fifty year period you are going to have a market that is down or bad five or six years and he will be the first to tell you this is a good time to shop for some good buys. Buy when the market is negative and you are positive you have a good buy. (A solid company...) Take action and take the bull by the horns in a bear market.
Buffett would be the first to say his homespun and positive philosophy played a big role in his becoming the richest person in the world (before he gave most of his money away). So buy big concentrated positions and hold for life. Most professional money managers protect against risk by diversifying. Buffett goes against the crowd here. When he finds a company he likes, he piles into it big time.
J.B. Kemp, llc will buy 2/3's stocks owned by (or Young Guns that a Young Warren Buffett might have bought...today.) Berkshire Hathaway and we will hold for the life of the investor and 1/3 into the top sector companies in America. When an investor sells his shares we take it out of the 1/3 category.
(We use IBD's Selector Tools and Charts to pick top stocks and sectors---five total stocks.) We do not use IBD's buy and sell concepts. We agree with Warren Buffett that the best time line for holding stocks is for- ever.
We help develop a plan and help you find the money for your investment.
We help you with your goals and keep you on track.
You take the first step and we do the rest.
We are persistent and work hard because investing is a marathon, not a sprint.
Leaving you free to focus your time and effort in being successfull in your career field.
We will deal and communicate with you as effectively as possible.
We take responsibility for our actions and are as honest, dependable and straight forward as possible.
We do not have commissions to pay everyday, because we buy and sell less often than other management companies. We hold the cash to buy in large blocks and thereby paying one commission fee. You and our company are paying out less in tax dollars as well, because we are selling only at you the investor's request.
Buffett believes that unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market. (I do not have the will to do that...I go to cash when a stock is going down by watching the charts.)
When the market and timing is right you can use some of your cash to trade an option on a stock you are holding to create income rather than selling the stock. (The cash comes from the dividends paid by some of the companies.)
This is truly a KISS formula.
There have been ten recessions since 1953. I have no clue where the market is going and neither does anyone else. So if someone promises a certain amount of growth, walk away. But do not be afraid to be innovative and to be different: following the herd is a sure way to mediocrity. Warren Buffett did not follow the wall street concept of buy and sell. Why? You have to pay broker fees each time plus if you have a capital gain...you have to pay capital gains tax.
Everyone wants no fees, no risk, double-digit returns. Everyone wants a pot of gold at the end of the rainbow. We go with the winning stocks that beats mutual funds and stock indexes that are loaded down with negative growth stocks as well as the good stocks. Too much diversification will hurt you! Why?
You will have too much cost in brokerage fees and when you are buying and selling all the time you will be paying to much in capital gain tax each year unless you are losing money in the stocks you are selling. It is a catch 22. Either way you are losing profits.
Goat meat is 50 percent to 65 percent lower in fat than similarly prepared beef, but has nearly the same protein content. And when you eat beef...eat grass fed beef that is high in CLA. Buffalo is not only a better red meat, but they improve the enviroment. CLA (conjugated linoleic acid) is a fatty acid that has been shown to have anticancer and anti-inflammatory properties, and may reduce risk of heart disease. Some studies have suggested that CLA may help reduce body fat and increase lean muscle mass.
