“Diversification is Protection Against Ignorance”…Warren Buffett
It has been a year since Steve Jobs
died. As I was reading through several articles on the first anniversary one
message stood out…Focus and Simplicity. Jobs’ success is owed due to these two
main qualities. We can all see the effect of “Simplicity” in the Apple designs…but what about Focus?
According to Jobs, “Focus
is about saying No”. Successful people are Focussed…be it Warren
Buffett, Steve Jobs or Gandhi. We face multitude of options in our daily life. However,
in order to use our limited resources effectively, we would have to pick and
choose. Let us take the example of investments . The traditional way of
thinking is to diversify and spread the money in different instruments such as
fixed deposits, Gold ,Real estate or the Equities…While this may reduce the
risk, you would barely get an average return
at a given point, because one of the investments may be pulling down heavily on
the others.
The argument that many of us have against
Focus approach is “what if I focus on one
thing and it is going to bomb”. Yes…I agree that there is a definite risk
element. The solution lies though in knowing enough what we plan to do and to
just do it. So you have some money and want to know if an investment in Real
estate would be worth.I would recommend a bit of research around the
topic such as:
1)
Which locality?...Current city…Home Town?
2)
What type of property…Land or apartment?
3)
How long can you wait to see the returns?...etc.,
If you don’t feel comfortable with the answers that you get
from your research ,you say No and move to another investment that you would feel comfortable
with.
While I have used Investment as an example, it applies to
any activity that needs our Time and or Money. So Focus…Do enough research
about something you want to do. Trust your instincts to decide if you want to
do it. And then Plunge into it… by putting most of the resources into it.
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