[bav]

Taking some of these theories to the extreme, everyone should invest in one company. Who needs diversity when all it does is reduce risk while also reducing performance? With that perspective, you should thoroughly research things and drop 100% of what you have into the single investment you think has the greatest probability of returning the most. Doing anything else decreases your expected return, after all, since you believe every other investment has a lower expected return.

But I'm not a gambler...I don't play black chip craps or blackjack and I don't dump $thousands into slot machines. I don't believe 5 stocks is nearly enough diversity.

If diversity is not what turns your crank, fine. If you're 22yo and you've got found money burning a hole in your pocket, gamble away. But that's not advice that fits very many investors; I'm investing a lifetime of earned income that I've worked my fanny off to get for almost 30 years and I don't like the idea of a single Enron or MCI event wiping out 30% of my networth.