Warren Buffett has overseen some truly jaw-dropping investment gains since becoming CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) more than 57 years ago. Berkshire's Class A shares (BRK.A) have gained more than 3,600,000% since the beginning of 1965 (through Dec. 31, 2021). This is a 120 times greater total return than the broad-based S&P 500, including dividends paid, over the same time frame.

While Buffett's well-documented willingness to hold his investments for many years, if not decades, is a big reason for his success, an oft-overlooked factor that's been responsible for the Oracle of Omaha's outperformance is portfolio concentration. In Buffett's view, diversification is only necessary if you don't know what you're doing.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

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Source Fool.com