Enterprising Investor Forum

Warren Buffett MBA Talk – Part 8 Wednesday, October 17, 2007

Here Buffett tackles the issue of diversification:

• either you want to add ‘intensity’ to investing and are prepared to devote time, analysis and effort to really understand the securities you are studying (probably 1% off all investors) – then all you need is about 6 holdings. As Buffett states “few people get rich on their 7th best ideas”.

or

• you simply want to participate to the market growth, without to much effort and therefore, you should just own a low commission index fund (99% of all investors) – thereby participating in the growth of the US.

The next questions he answers are about investing in Procter & Gamble (PG), Coca-Cola (KO) and McDonald’s (MCD).

Enjoy: