Wide diversification is only required when investors do not understand what they are doing

Warren Buffett

I think diversification and all that stuff they’re teaching at business school today is probably the most misguided concept anywhere

Stanley Druckenmiller

We are looking to compound our wealth at above average rates of return over a long period of time and are not looking to outperform any index over short period of time. 

We also know that a high level of portfolio concentration can by no means guarantee exceptional performance, but a high degree of diversification virtually guarantees a mediocre one. Since high quality businesses are rare and there is no point allocating capital to our n’th best idea, we tend to own a limited number of companies in our portfolio. Typically, we would own 15 positions. We also do not believe in “taking profits” or “trimming positions” or “hedging downside” – neither does Jeff Bezos or Bill Gates.