Customer Quote by John Mihaljevic
“It seems unwise to allocate a large portion of investable capital to any one deep value opportunity, even if the latter promises a large expected return.”
About This Quote
Source Investment Guide: Portfolio Management Principles, 2020
Diversifying reduces risk; putting too much into one deep value bet can be dangerous despite high expected returns.
In simple terms: Don’t concentrate all capital in one risky bet.
Key Takeaway
Diversify to protect against loss.
Themes
finance
risk management
investment strategy
Mood
analytical
cautious
Type
financial
educational
When to use this quote
- stock selection
- asset allocation
- financial planning
Key Concepts
portfolio theory
deep value investing
Questions to Reflect On
- How do you balance risk and reward?
- What criteria define a deep value opportunity?
A Different Perspective
High returns may be illusory.
