1.
It is possible to plan an optimum diversification thus reducing the risk
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They offer the simplicity of a stock trading along with the diversification of a
3.
He called it diversification to cover the bad times of
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that fueled this diversification, albeit the largest at the time
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The addition of companies with less operating risk is a method of diversification that works
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number of products and processes, it will be doomed by a lack of diversification
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Diversification can smooth out this risk, but each firm
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diversification as much as it needs to seek out high profit, “riskier”, projects
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vitamin company is more risky from a diversification standpoint
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Since the objective of diversification is to lower
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questions that fuel diversification and are the reason that more diversified companies have
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diversification; if all methods point us in the right direction, the probability of being wrong is much less
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and diversification within the company itself
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When all financial managers act in concert, there is less diversification of assets, and so
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In fact, almost all diversification has the
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Such diversification according to functionality will be very useful in developing a model of distributed agency in the cyberspace domain for the average, unintegrated
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The Permian witnessed the diversification of the early
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diversification correlates with emergence of gigantic macro-
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diversification and overtaking pigs in numbers of species
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This diversification will help you grow a stable profitable business that you own, one with true equity
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This will give you more diversification of your traffic, which Google will
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For better diversification, you could devote part of your raise or bonus to your mortgage and then invest the rest
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investors now use structured products as way of portfolio diversification
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stop you but that would reduce your diversification and expose
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We'll deal with diversification first as it may be one of the
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Proper diversification means choosing 10 to 20 stocks
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Of course diversification means you wil have some better and
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Let's start off with an explanation of proper diversification
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But first, a look at what proper diversification clearly is not
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"But that's not diversification," I complained
31.
Since he’d joined the firm, diversification had been Amory’s watchword; Regan had been aware of it largely as a succession of debt-financed acquisitions awaiting the board’s approval
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Meanwhile, in the name of diversification, Keith was now long on the City itself
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However, long-term investors have been taught this important lesson time and time again: the supposed benefits of diversification are not there when they are most needed
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You will win or lose on the long and short sides of your book as two large blocks, regardless of what diversification you thought you had built into the equation
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Also be aware that the diversification effect you expect between noncorrelated parts of your book may not be there
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In a nutshell, correlation is bad because it destroys diversification effects—diversification is not there exactly when you need it most
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With a bond fund you get professional management, broad diversification, and high liquidity at very low cost
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Risk management at TOMIC involves position sizing, money management, trade adjustments, portfolio insurance, and portfolio diversification
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• Does the new trade maintain the balance or diversification of the portfolio? Is it overexposed in any one sector?
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For position sizing to work, TOMIC must be aware of portfolio diversification
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This mix will create good diversification
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That's because insiders are willing to sell a stock for many reasons (diversification, buying a second home, sending a kid to college) but they are willing to buy for one main reason—they expect their company's stock to go up
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This strategy applies on a number of levels: both diversification among asset classes, such as bonds, stocks, and commodities; and diversification within an asset class, such as diversifying commodity holdings among energy and metals
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Modern Portfolio Theory and the benefits of diversification
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The idea that diversification is a good strategy in portfolio allocation is the cornerstone of Modern Portfolio Theory (MPT)
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This pooling provides both leverage and diversification opportunities that smaller accounts don’t offer
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This new breed of fund enables you to buy into a fund that offers the diversification inherent in a mutual fund and the added benefit of being able to trade that fund like a regular stock
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Thus, you get a powerful combination of diversification and liquidity
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However, more commodity ETFs are in the pipeline that will offer greater diversification benefits
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Modern Portfolio Theory (MPT): The brainchild of economist Harry Markowitz, MPT stipulates that investors stand to benefit through diversification
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Gold is, after all, a good thing to use for a splash of diversification; not that many gold bugs see it that way
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Let me give two examples of why, even with gold, diversification is a good idea
53.
Meanwhile I would buy some more Volex in the specimen portfolio were it not for the fact we are in diversification mode
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This is the point of diversification
55.
This is where we are playing, which is seen as high risk but over the years, at least to me, if played with diversification, no risk at all
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You can see the similar trend, but the legacy portfolio is mature and has different levels of exposure to certain stocks because it has its wide diversification of over 30 shares which allows growing certain companies beyond one equal lump
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That’s the core value of diversification
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That’s why you should always aim for diversification even as your successes and failures pull your portfolio out of shape and unbalance it
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Now I’m left having to decide between my opinion of the share and my belief in the theory of diversification
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That’s why I go on and on about diversification
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In other words, diversification might be necessary to reduce the risk involved in the separate issues to the minimum consonant with the requirements of investment
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The guaranty or surety company is large, well managed, independent of the agency selling the mortgages, and has a diversification of business in fields other than real estate
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The amount of each mortgage was limited to not more than 60% of the value, carefully determined; large individual mortgages were avoided; and a fair diversification of risk, from the standpoint of location, was attained
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Unlike, say, venture capital, with which the investor is seeking a pot of gold (albeit with some diversification so that the occasional winner offsets the losers), the chart is relevant to the large segment of any portfolio designed to create a rate of return for opportunistic capital
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The instability of individual companies may conceivably be offset by means of thoroughgoing diversification
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But of these two dangers, the latter may be offset in part by careful selection and chiefly by wide diversification; the former may be guarded against by unvarying insistence upon the reasonableness of the price paid for each purchase
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Assuming (1) diversification, and (2) reasonably good judgment in selecting companies with satisfactory prospects, it would seem that the speculator should be able to profit rather substantially in the long run from commitments of this kind
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Because there is almost always a scarcity of great opportunity—Buffett says you are lucky to have 20 great ideas in your investing lifetime—a narrow search could result in less-than-optimal diversification
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There should be adequate though not excessive diversification
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The typical “special situation” has grown out of the increasing number of acquisitions of smaller firms by large ones, as the gospel of diversification of products has been adopted by more and more managements
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At bottom, this is the reason for the wide diversification practiced by the investment funds
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4 The prevalence of wide diversification is in itself a pragmatic repudiation of the fetish of “selectivity,” to which Wall Street constantly pays lip service
73.
Let him emphasize diversification more than individual selection
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Incidentally, the universally accepted idea of diversification is, in part at least, the negation of the ambitious pretensions of selectivity
75.
(To learn why such broad diversification is so important, please see the sidebar on the following page
76.
In the previous chapter we have dealt with common-stock selection in terms of broad groups of eligible securities, from which the defensive investor is free to make up any list that he or his adviser prefers, provided adequate diversification is achieved
77.
It’s expensive to trade small lots of convertible bonds, and diversification is impractical unless you have well over $100,000 to invest in this sector alone
78.
But in the next two years the banks advanced the enterprise nearly $400 million additional for further “diversification
79.
” Presto had also followed a diversification program, but in comparison with General it was modest indeed
80.
SEQUEL: General continued its diversification policy in 1969, with some increase in its debt
81.
If the investor could now find ten such issues, for diversification, he could be confident of satisfactory results
82.
During the past decade it adopted a policy of diversification in what seems a rather outlandish form
83.
There is a close logical connection between the concept of a safety margin and the principle of diversification
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Diversification is an established tenet of conservative investment
85.
By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion
86.
” In his case diversification is foolish
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It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity—provided that the buyer is informed and experienced and that he practices adequate diversification
88.
Furthermore, in this wide array of companies there is plenty of room for penetrating analysis of the past record and for discriminating choice in the area of future prospects, to which can be added the higher assurance of safety conferred by diversification
89.
bonds: and advice; and aggressive investors; and asset allocation; and bargains; calls on; and characteristics of intelligent investors; common stocks compared with; and convertible issues and warrants; coupons for; “coverage” for; defaults on; and defensive investors; discount; distressed; and diversification; earnings on; and Graham’s business principles; and history and forecasting of stock market; inflation and; interest on; and investment funds; and investments vs
90.
Today thousands of independent financial-planning firms perform very similar functions, although (as analyst Robert Veres puts it) the mutual fund has replaced blue-chip stocks as the investment of choice and diversification has replaced “quality” as the standard of safety
91.
For indisputably skilled investors like Warren Buffett, wide diversification would be foolish, since it would water down the concentrated force of a few great ideas
92.
” For most investors, diversification is the simplest and cheapest way to widen your margin of safety
93.
† For another view of diversification, see the sidebar in the commentary on Chapter 14 (p
94.
Diversification is inescapable
95.
In his writing and his practice at Graham-Newman, Benjamin Graham explicitly endorsed the importance of diversification
96.
Much depends on the conception of risk, on whether the manager has strategies to reduce risk in addition to diversification, on the willingness and ability to make use of alternatives to ordinary stock and bond investments, and on the expectations of the manager's clients
97.
Modern investment theory makes diversification one of the two central features of its approach to a proper investment strategy