Concentration is a feature, not a risk

Diversification gets called the only free lunch in finance. We think the lunch is overpriced the moment you can no longer say what you own.

Holding a hundred businesses does not make you safe. It makes you average, with more paperwork. You cannot know a hundred companies well. You cannot visit them, re-check them, or notice the morning one of them quietly breaks. Owning a lot is often a hedge against ignorance, not against risk.

Risk is not how many things you own. It is how well you know each one.

Eleven is a number we can hold in our heads. We know every management team, every big customer, every plausible way each business could fail. When you own little, you can afford to know it completely. That is the only diversification we trust.

The views above are the firm's own and are provided for information only. They are not investment advice, nor an offer or solicitation to invest. Capital at risk; the value of investments can go down as well as up, and past performance is not a guide to future results.