/biz/ - Business & Finance

>>23898210
It's a lot of inexperience and beginners confidence. People looking to get rich fast and easy. Then they work backwards from that point and decide they want to risk it all on a handful of stocks. It's not like it's impossible, but as Rick Rule says, why would you take such a huge risk when buying the index guarantees you a 3 bag minimum. Nobody adjusts for risk, and this mindset guarantees you get fucked eventually, and bad. The worse part is they don't even do their DD on the stocks, they just buy what's shilled. It's the worse of both worlds, and I bet there are a lot of silent bagholders lurking right now.

I don't think there's an understanding that the basket approach is extremely common amongst the best and most respected. Sprott, David Morgan, Jeff Clark, Don Durret, Gwen Preston, Jordan Roy-Byrne, David Erfle, Libo Tiggre, GV, the list goes on and on. They understand the pareto principle, that 80% of your gains come from 20% of your holdings, then they overweigh which picks are likely the 20%. That's where the confidence and concentration actually come into play.

Here's a pretty good chart for mining stock guys.