Risk comes from not knowing what you are doing so wide diversification is only required when investors are ignorant. You only have to do a very few things in your life so long as you don't do too many things wrong.

Traditional wisdom is long on tradition and short on wisdom.

Someone's sitting in the shade today because someone planted a tree a long time ago. The person sitting in the shade now should be grateful for the person who planted and tended that tree. That includes all those benefactors of humanity throughout history that created, invented, financed, produced, maintained and improved all that we enjoy today.

I happen to have a talent for allocating capital. But my ability to use that talent is completely dependent on the society I was born into. If I'd been born into a tribe of hunters, this talent of mine would be pretty worthless. I can't run very fast. I'm not particularly strong. I'd probably end up as some wild animal's dinner.

Does the business have favourable long term prospects?

I choose to work with every single person that I work with. That ends up being the most important factor. I don't interact with people I don't like or admire. That's the key. It's like marrying.

[People] have seen the credit market seize up. They're worried about money market funds, although the latest proposition from government should take care of that. They've seen eight percent of the bank deposits in the United States get moved very skillfully, I might say, within the last couple of weeks from institutions that they thought were fine a few months ago to other institutions. They are not wrong to be worried.