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What Berkshire Hathaway's Amazon Investment Can Teach Investors

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Berkshire Hathaway (BRK.A) , Warren Buffett's company, disclosed that it owns a position worth over $900 million in Amazon (AMZN) Wednesday night. 

Jeff Marks, senior portfolio analyst for Jim Cramer's Action Alerts PLUS investing club, used the Berkshire Hathaway investment as a teaching moment for investors who may have too large of a position in a single company. 

"From an investment perspective, that's a great point. And it's actually, you know, you mentioned our Action Alerts PLUS call earlier in this program we actually talked about what happened, what it means for investors if they have a position too large for their portfolio, what it means and what are the impacts of it. Back in our August conference call from 2018...And we actually used Amazon as an example," said Marks. "So it's perfect here but really what we kind of guided for is that if you've one position in your portfolio, that is too beholden because it's too large and its daily swings will affect the movements of your portfolio. If it's down too much one day and portfolio could be down, even though it was an up day. That might be a sign that you're playing with fire and it might be a sign that you might need to just trim it just to kind of smooth things out. And, and make sure you're still having the benefits of diversification within your portfolio."

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