Concentration Risk Quotes

The idea of excessive diversification is madness.

The idea of excessive diversification is madness. Wide diversification, which necessarily includes investment in mediocre businesses, only guarantees ordinary results.

Behold, the fool saith, "Put not all thine eggs in the one basket" - which is but a matter of saying, "Scatter your money and your attention"; but the wise man saith, "Pull all your eggs in the one basket and - WATCH THAT BASKET." - Pudd'nhead Wilson's Calendar

It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.

No plan can prevent a stupid person from doing the wrong thing in the wrong place at the wrong time - but a good plan should keep a concentration from forming.

As a result of overdiversification, their (active managers) returns get watered down. Diversification covers up ignorance. Active managers haven't done enough research into any of their companies. If managers have 200 positions, do you think they know what's going on at any one of those companies at this moment?

We don't want to bank all our risk on a small collection of big companies. We don't want to lose 20 percent of our business if one big account goes away.

Greater economic power will be in the hands of too few.

This galloping concentration in broadcast ownership is unhealthy.

The danger in media concentration comes not from the concentration, but instead from the feudalism that this concentration, tied to the change in copyright, produces.

A question that often comes up at times of strategic transformation is, should you pursue a highly focused approach, betting everything on one strategic goal, or should you hedge? ... Mark Twain hit it on the head when he said, Put all of your eggs in one basket and WATCH THAT BASKET.

The risk of relying on a handful of customers is not just financial. Your product also is at risk when you're at the mercy of a few big spenders. When any one customer pays you significantly more than the others, your product inevitably ends up catering mostly to that customer's specific needs.