6. Wayne Himelsein: Negative Skew, Ergodicity and Thoughtful Diversification
Mutiny Investing Podcast
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Naive Diversification or Negative Correlation?
The idea that just adding more greater numbers is diversifying. Adding thoughtful offsetting exposure is not naive it's thoughtful diversification. Low correlation still means that you move a lot together if you really want to be diversified then you need negative correlation I'm not saying that's easy to do but that's real diversification versus low correlation which non-argotically a good percentage of the time things can move together in extreme ways right so added numbers isn't the uh kind of a naive way to think about itUh whereas adding thoughtful offsetting Exposure is not naive It's thoughtful diversization um and another way toThink about this is in terms of correlation where a lot of people would say well
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