Advanced Automatic Investor

[Conrad]

Irwin: On the lottery you wrote:


The Lottery would only cost a Quarter but it would cost to much to handle all those bags of coins.
I am sure you agree.

No, I do not agree. The cost of the lottery is all the money that is paid out. As the payout rises, so does the price of the ticket, if the number of tickets remains the same.

On my point of all the money in one basket you missed my point. If the basket contained a sure winner(Insured real estate) then I would not lose anything. If on top of that the my sure-winner-payout was higher than any basket with 20 stocks in it then I would outperform the diversified basket. Simple mathematics.

Diversification doesn't autmaically reduce risk. It might even increase it.

My mind is made up. Don't confuse me with your facts(TIC).



Conrad