It is so easy to make money when times are good, the wind is at your back and the tide is rising. In fact, for most people, the more they make the smarter they seem to become, venturing into all kinds of investments and side businesses which have nothing to do with what made them successful in the first place. As one of my teachers told me years ago, “Success breeds complacency” and never has this degree of complacency been more evident than the perfect storm we are witnessing in our credit markets today….

In a recent interview, the new CEO of Citi, Vikram Pandit made a startling announcement. He said Citi would divest themselves of businesses that did not fit with the rest of the group. “We’re getting out of all our hobbies and focusing on our core competence.”

This is without a doubt one of the smartest things I’ve heard a Fortune 500 executive say in 25 years! The reality is sticking your nose or your pocketbook into things you know very little about is a prescription for disaster.

As Warren Buffett has said:

“The greatest personal fortunes in this country weren’t built on a portfolio of 50 companies. That’s the Noah’s Ark way of investing. They were built on one wonderful business. Almost without exception, when they strayed from that wonderful business that made them rich, they ended up losing money.”

Keith Cunningham, from keystothevault.com