Great individual wealth has been built through investment concentration, a JPMorgan report notes. But, as 2015 and 2016 has proven with concentrated portfolios from the likes of William Ackman’s Pershing Square and Larry Robbins’ Glenview Capital Management, both of whom, after achieving great success, find themselves at the low end of the returns scale in 2016. The top hedge fund stories of 2015 & 2016 have been related to investment concentration in the stock of Valeant Pharmaceuticals. This one-time can’t miss hedge fund favorite is a prime example of the risks of investment concentration, a debated method that has also…
On This Page
- Age-old battle: Investment concentration advocated by Buffett, Graham, at odds with Markowitz, Litner, managed futures research
- The fairy tale vs the boring reality: "75% of all concentrated investors would benefit from diversification"
- Long-term success and wealth preservation based on probability and logic, not investment concentration
- Statistically speaking, odds of an investor successfully betting on a big winner shows investment to generally be a big loser and volatility sends a message
- Consider recent concentrated investments in Valeant and the health care segment in general as a poster child for the risks of concentration
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