Few high-profile money managers have a nose for making money quite like Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett. In the 57 years since taking the reins, the Oracle of Omaha, as he's come to be known, has led his company's Class A shares (BRK.A) to a jaw-dropping average annual return of 20.1%.

Buffett's willingness to stick with his investments for many years (if not decades) and his love of dividend stocks are two reasons he's been such a successful investor. But a key ingredient to Buffett's success that's often overlooked is his portfolio concentration.

The Oracle of Omaha believes diversification is "protection against ignorance." In other words, buying a boatload of stocks makes sense only if you don't know what you're doing, according to Buffett. Although Berkshire Hathaway's $313 billion investment portfolio has stakes in around four dozen securities, more than $241 billion of invested assets -- 77% of total portfolio value -- is tied up in just six stocks.

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Source Fool.com