Wednesday, May 07, 2008
Charles Atlas: Diversification is for 40 Kg Weaklings
In the comic books of my childhood there was the picture of a scrawny weakling on the beach being thrown to a side by a muscle man, while a beauty in swimming suit watch the scene. Down in the page it was the seminude picture of Charles Atlas himself, the world most powerful man, Mister Universe himself, promising to tranform any 40 kg bone bag of a weakling into a mighty beach bully. Gentlemen, I postulate that portfolio diversification is for trembling weaklings alone. A real man focusses on the opportunity and goes for it with all his might. Quitters newer win, winners never quit. Portfolio diversifiers never win, at most they lose less. To win, you have to put all your eggs in one basket and put them in a bag on the roulette table. POT has reached 200$ (it is 400$ because there was a split a year ago). Those who put their money on POT, are now rich. Those who put their money on ICL (Israel Chemicals) are now almost rich. Those weaklings who feared to bet all on ICL and diversified into a "balanced portfolio", distributing their risks and hedging them, have been ¨balanced¨ to a no-win no-lose situation. Is Charles Atlas still selling mail order courses promising to make portfolio diversifiers into real men?