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<p>[QUOTE=&quot;medoraman, post: 1368214, member: 26302&quot;]That number is misleading. You would be picking some VERY weird stocks, as 7 stocks to eliminate 85% correlation is about the limit, and you would be forced into paying for some pretty horrible stocks in order to lower the correlation. Now, at around 25 stocks you can lower it well in excess of 90% and have nearly unlimited freedom to pick better stocks, (assuming a couple of rules). On the flip side, a person could pick 25 stocks, and if they did not know how to eliminate correlation still be very vulnerable to high correlation. Again, a modicum of knowledge can help greatly.</p><p><br /></p><p>Remember, Buffett has been around stocks for 60 years, to him its his daily world. Of course its easy for him, and easy for him to educate about it, yet so so many people wimply are unwilling to learn the principle, and get into trouble.[/QUOTE]</p><p><br /></p>

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