Here is a relevant article posted on Forbes:
Buffett's Bad Advice
The headline is obviously for click traffic, but he makes an interesting point that got me thinking. He argues that an index fund is NOT diversified, particularly in 'bubble phases', because high valuations in a particular sector skew the index away from representing the broader market.
He doesn't back this hypothesis with actual return scenarios, because he knows that he is just trying to stir the pot without backing anything up. It's pretty easy to see that over the long run, the S&P 500 tracks like the Russell 2000, tracks like the Wilshire 5000.
Granted, it's not the investing strategy of this thread, but index investing is another form of investing 101 that helps people grow their wealth to retire. I think he's doing a huge dis-service by scaring people away from even the most basic form of saving and earning compound interest. For some credibility, I wish he would have just said "buy an even broader index than the S&P if you're a risk averse investor" rather than spooking people away from Buffett's reasonable advice.