Challenges to conventional investment wisdom abound these days. Now Jim Rogers says diversification is garbage—stick with what you know, pick the right basket, put all your eggs in that baby and let it ride.
Well, not exactly. But the always entertaining outspoken investment commentator, author and co-founder with George Soros of The Quantum
Fund hedge funds, said nearly as much in a recent interview.
“Diversification is something that stockbrokers came up with to protect themselves, so they wouldn’t get sued [for making bad investment choices],” Rogers told BusinessWeek investing reporter, David Bogoslaw in a recent interview. “Henry Ford never diversified, Bill Gates didn’t diversify. The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket,” says Rogers. “You can go broke diversifying.” (Click here to read the interview transcript.)
Wow. This is heresy, no? Put all your eggs in one basket? Is Harry Markowitz’s Modern Portfolio Theory really bunk? Outdated? Read more about recent attacks on MPT, here.