Personal finance experts preach the importance of diversifying your portfolio. Having too much money invested in a single stock opens the door for wild swings in your wealth. One unexpected change in the company, the industry, or government regulations could wipe out a good chunk of your portfolio's value.

Warren Buffett doesn't think diversification is always necessary when it comes to constructing a portfolio. He's gone so far as to say, "diversification is a protection against ignorance." In Buffett's opinion, if you know how to analyze a business, its industry, and its stock, there's no need to own more than a few wonderful companies.

True to form, Buffett puts his money where his mouth is. A whopping 67.3% of Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) $361 billion portfolio is invested in just four stocks.

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Source Fool.com