The common numbers thrown around are that with 20 stocks your portfolio risk is reduced by 70%. The corresponding ratios follow. So in that sense it's not that bad.

Of course that's just one form of risk. The less attractive aspect of a 20 stock strategy comes from the fact that the majority of the market's returns come from very few stocks - The 80/20 rule applies pretty well here. With only 20 stocks you'll probably miss out on the few winners that contribute all the market's gains. It's very easy to end up with a 20 stock portfolio with low risk/variance and low returns.

Of course if you are Buffet, then your goal is to pick 20 stocks that all outperform.