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This interesting blog post mentions this too (namely don't invest more than 2% of your wealth at once):

http://www.jamesaltucher.com/2010/11/what-do-you-do-after-yo...

Any number like that 2% is pretty silly. Different people have different needs, different current resources, and different comfort zones. The only thing that can really be said about how much to invest is the old rule, "Don't bet more than you can afford to lose", however much or little that may be.

You misunderstand what the 2% is about. The 2% is about Kelly criterion optimal bets.

Yes, don't bet more than you can afford to lose -- but don't bet more than 2% on a single horse.

Buffett may be a huge anomaly but he probably never had close to 50 positions in his stock portfolio at any one time.

Some of the best investors concentrate.

Buffett can get away with large investments because he picks conservative stocks. Investing 20% of your portfolio in Coca-Cola Inc. is far less risky than investing 20% of your portfolio in Google.

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