Why Diversification Results In Mediocrity

While there is unquestionably some truth to the idea that the world is often too random to literally make just one bet, the widely held assumption that diversification is a free lunch is just plain wrong. Just as there is benefit to be derived from diversification with respect to risk, there is a cost, too — that of losing whatever edge you might h... See more

Warren Buffet and many of the best investors I know favor making a few very well-informed bets rather than opting for significant diversification.