/biz/ - Business & Finance

>>56841743
>Should I go all in on one thing or diversify a lot?
Diversification for its own sake is bad because it's taking resources away from your best idea to put it in your second best idea, third best idea, and so on.

But there's 2 problems with concentration. 1 - you might pick wrong. 100% Apple was a great portfolio the last 20 years and it would be hard to do better. 100% Lehman Brothers was not. 2 - events outside your control can ruin an otherwise good choice. If Apple HQ had got hit by a meteor you would have been pretty upset.

There's a lot of really bad stocks in large indices that you don't want exposure to so picking above-average stocks isn't necessarily that hard. But if you don't have any ideas you're convinced will beat the market then just keep everything in a relatively diverse ETF like VIG until you do.

To mitigate risk I think you really want at least 5 relatively uncorrelated positions (different industry, different nation, etc.). So when you do come across something you think will be a better investment than a broad index you should probably keep it less than 20% of your capital.

You probably don't want to pursue more than 20 or 30 individual positions even if you think they're all really good. At that point keeping track of them all to be sure they're still good investments each year will take a lot of time and effort that's probably not necessary.

>>56751012
these kinds of high capex companies usually run in cycles because they expand capacity until the commodity gets too cheap then stop expanding and supply tightens until it gets too expensive

take a peek at the commodity futures to get an idea where in the cycle you might be and then decide if waiting is worth it