Barron’s: Diversification Isn’t Essential

Most investors would shy away from a highly-concentrated 20 stock portfolio. Many studies show that when it comes to investing, diversification is the name of the game. One bad pick in a concentrated portfolio can overhang investment performance for years. But while research shows that the average investor should try to diversify away risk, many professional investors have made a name for themselves running an extremely concentrated portfolio. For example, Warren Buffett, Charlie Munger, Bill Ackman, Michael Larson, Glenn Greenberg and a number of the Tiger Cub hedge funds have all made a name for themselves running a relatively concentrated portfolio…