I agree John, this is very true. And one must have a level of confidence that is very close to 100% certainty to load up 65% of his/her net worth into a single position. In my opinion (I could be wrong here) the place where Buffet has been the most explicit on his quantitative method to determine which position(s) deserve higher concentration is in his January 1966 Partnership letter. Here is the link (on pages 10 ,11 and 12) http://z822j1x8tde3wuovlgo7ue15.wpengine.netdna-cdn.com/wp-content/uploads/2015/07/1966.01.20.pdf

He does not mention however how he quantitatively determines the respective weights.

Great point! As always with Buffett, easier said than done – especially with (a).

As for (b), I think Buffett would say invest as much as possible if you are confident and there is a huge margin of safety – which is HUGELY contrary to conventional thinking (about anything, not just finance).

When he was 21, Buffett put 65% of all of his net worth into Geico. Ben Graham even invested 25% of his capital in Geico even though he usually limited his investments to 5%. They both were incredibly confident and saw a huge margin of safety in the company. Geico of course is the #2 largest auto insurer in the country today and is a huge part of Berkshire Hathaway’s business.

But doing something like that is a huge risk if you don’t know what you’re doing – which was Buffett’s point of thinking about having a 20-slot punch card.