Looking Beyond End-Market Diversification Focused on Concentration and Diversification

Gaining a Position to Win in any Situation

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One reason focused investing works is that you box yourself into what I think is a very positive corner. You force yourself into the position where you can’t afford to be wrong, so you’d better do all your homework. My goal is to buy a stock at such an attractive price that even if we’re wrong, we get more than our bait back. Sometimes that comfort comes from hard assets. Sometimes it’s the private-market value of the business. We also manage risk by going in when the company is already starting to do the right things. If you’re in a concentrated, illiquid situation, the last thing you need is to have to convince somebody to do something.
Source: http://www.valueinvestorinsight.com/