Quote:
Originally Posted by pelagius
Since this is the major implication of portfolio theory doesn't it suggest you are engaging in or buying into the importance of mental oil changes ...
P.S.
I would not got around condemming portfolio theory ... address a specific weakness but don't engage in some silly characterization based on meeting a smart guy who didn't like it.
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Reread what I wrote, not what you want me to have meant. I mentioned someone else condemned the theory, I indicated others could use it if they choose.
I was suggesting, maybe not clearly enough diversification. Diversification could mean a portfolio of large cap value, large cap growth, small cap value, small cap growth and an international blend.
You wouldn't have to have bonds, real estate, commodities, etc. to be diversified as you probably would have to have those in order to be following the portfolio theory.
Anyway, I find diversification is enough of a mental oil change without moving onto diversification on steroids in order to get a mentally chanllenging oil change.
To each his own though. I personally would not condemn someone if the chose the "theory" as their discipline to invest by. My advice would be stick to it and don't switch with every new theory you here.
As for "genius investors". Those folks give us long term capital, over the counter bubbles and sub-prime. The first genius I encountered was Michael Milliken (sp) who gave us Junk bonds.