Two risks. One paycheck.
01
Every holding carries two risks. The company's own, and the market's. Only the second one comes with an expected reward.
02
Company risk is a free lunch in reverse. Owning enough names sheds almost all of it at no cost to your expected return. Concentration keeps it on the books, unpaid.
03
So the question is never just how much you believe in a stock. It is how much of its risk the market is actually paying you to carry. Six researched names still hold a pile it will not.
The market pays you for the risk everyone is forced to share, not the risk you chose to keep. Diversification is not caution. It is refusing to hold the risk that was never going to pay.