Why you should put all your eggs in one basket

Today I was reviewing my Investment Coaching notes and preparing for my next session and then I came across a quote from Will Rogers that says; 

“Don’t gamble! Take all your savings and buy some good stock and hold it till it goes up. If it won’t go up, don’t buy it.” 

 I think it is a very deep quote that will get you  to do more work on finding a good stock than you will expect. It seems as a good Investment policy to adopt but the questions that will follow are; how do you know it will go up? How do you get rid of some risk though diversification?

After thinking this through over and over again, I strongly agree that when the right work is done in finding the right and good stock / company, putting everything you’ve got in it is simple a smart move allowing yourself to achieve high long term growth even if that means accepting some significant short term swings in value.  I am very much aware of the squad at the other side of the room with the view that, it is unwise to put all your eggs in one basket.  My question to them is what if the basket is well protected and the eggs are so safe that nothing can go wrong?  

I see that form of investment as a way of building your wont small cap company and enjoying the returns. With you putting in more and more, you may even get to enjoy some degree of management control.  According to Rich Dad, Kiyosaki, this will require the Three E’s- Excessive cash, Education and Experience. He called it the Insider Investor.

Bottom Line: Spreading investment across a number of assets will eliminate risk but not all of the risk and hence you should rather Take all your savings and buy some good stock and hold it till it goes up. If it won’t go up, don’t buy it.