I am a big fan of diversification

I dislike terms such as "conviction" and "concentration"

I do not know what my best ideas for the next 30 years are going to be

Most people do not know either

I do know that I will be right only on about 40% - 60% of my business selections

Hence, I try to diversify. I also try to follow a sound business selection and risk management process.

I try to allocate an equal amount into each company I select, which limits my risk.

This in a portfolio of 50 companies, I would risk 2% per position. 

If I am wrong about a company, the most I can lose is 2% in this scenario.

However, I rarely sell. Hence, my portfolio would likely end up concentrating itself in my "best ideas" about 10 - 20 -30 years from now. 

Those best ideas would likely help pay for the ones that didn't work out. And they would likely help propel the portfolio income and intrinsic value forward.

In general, a diversified portfolio would have its fair share of winners and losers. It's hard to predict those in advance.

However, by following a sound process of business selection (fundamentals and valuation) and a sound risk management process, the investors stands a chance of reaching their stated goals and objectives.

That process can pay rising dividends for the future retiree

My goal is to generate enough in dividends to pay expenses, and for them to grow above the rate of inflation

So I look at it from that perspective

If I get a dividend suspension in a 20 stock portfolio, the hit would be larger than in a 50 stock portfolio.

In the first place, I need a roughly 5% increase from the other companies to get back to "even" in income 

In the second place, I need only a 2% increase from the other companies