Philosophy
The case against diversification
Owning everything is a confession that you can't tell the difference.
Diversification protects you from not knowing what you own. That is genuinely useful, if you do not know what you own. We have built the firm so that we do.
The maths of owning widely is quietly unforgiving. Your hundredth-best idea is, by definition, worse than your tenth. Every holding you add past the point of real conviction waters down the ones you believe in most, in exchange for a smoothness you may not need.
We are not reckless about this. Concentration without knowledge is just gambling with fewer chips. But concentration plus deep knowledge plus a long horizon plus patient capital is, we think, how real wealth has usually been built. By people who put serious money behind a few things they understood completely.
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.
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