Position Sizing in a Value Portfolio

Buffett has held more than 40% of Berkshire in a single stock. Munger has made the same. Most investors are told to hold 30 positions for diversification. Who is right, and why?

Why This Matters

Position sizing in value investing is the discipline that translates investment conviction into portfolio construction. It is also where most investors — institutional and individual alike — make systematic errors in both directions: over-diversifying to the point where their best ideas cannot meaningfully move the portfolio, or under-diversifying to the point where a single mistake is catastrophic. The goal is a portfolio where position sizes reflect genuine conviction and margin of safety, not habit or index-tracking.