You only need one stock

If you invested 1% of their portfolio in Apple in September 1997 when Steve Jobs returned as CEO with the rest in the S&P 500, you would have 3X more returns than just investing in the S&P 500.

Only one investment can change your life.

But the issue is that you would have 68% of your portfolio in Apple. Would you be able to sleep well at night?

That doesn’t mean that you need to diversify.

You can lower your exposure with constant reinvestment.

This is the strategy used by Warren Buffett.

In 1994, when Warren Buffett last bought Coca Cola, it was 43% of the equity of Berkshire Hathaway. Today, it is 3.7%. He didn’t sell shares. He just leveraged insurance float as a source of cash flow to keep investing.

As Warren Buffett famously said, “no one would get more than 20 good ideas in their lifetime.” and looking at his performance, he is right. Most of his gains came from a few investments.

Continue reading on Substack: https://ishfaaqpeerally.substack.com/p/you-only-need-one-stock