I would have to disagree with finding a good broker.
I know a few good brokers and the problem is that they are brokers - this means that they have to watch too many things, contacts or no contacts.
I find that I always know more than they do about the companies that really interest me - why?
Because I only watch a few companies intimately - a broker can't do that by virtue of their profession.
A fund manager can do that if they do choose, but not many do.
Brokers also have a completely vested interest in you buying and selling - it is of no good whatsoever for you to buy 10,000 bhp shares and keep them for 20 years to your broker - he would be broke in 12 months with clients like that.
imo, the way to go is this - you need to have a big enough shareholding to make it so the ceo will take your call or your email or will meet with you.
Unless you have 10's of millions that is not possible. Unless you have hundereds of millions it is impossible to do it with big companies.
To know a company intimately -
1. It has to be a small or medium sized company - big one's are far too complex.
2. You have to be close and you have to watch closely - watch the detail - you can only do some of that if you have a good relationship - that is difficult to do in a big company unless you are way up in the register.
3. There is only so much time in a week - you cannot possibly know a company's temperature and pulse if you are trying to track 20 of them - 3 or 4 max imo.
4. SUPPORT YOUR COMPANY - if it is a dud, you shouldn't be in it. But if you believe the story - tell everyone, be one of the cheer squad on forums - fight for them. They will notice and if ever you need to know something - the chances are far greater if you are a friend rather than a winger.
Supporting them does not mean falling in love with them - trust them, but always cut the deck. If you see something wrong - talk to them about it - they sometimes miss things and may well be grateful for your input. If they are arrogant - maybe you should think about pulling the pin. If they are good - they will listen.
Diversification is death - it is the guaranteed way to mediocre performance - diversification was invented by fund managers so they don't look poorer than their peers - it has absolutely nothing to do with building wealth.
Every single person who has built great wealth has done it by concentration - not diversification. - eg. Think Ford, Bill Gates, etc etc.
