TIP447: How to Build a Human Bias Defense System w/ Gary Mishuris
We Study Billionaires - The Investor’s Podcast Network
Seek Independent Business Outcomes for Diversification
In managing an investment portfolio, diversification is crucial to guard against undue correlation of risk. It is not about avoiding short-term market losses but ensuring that business outcomes are not highly correlated. Investors should aim for investments to be as independent of each other as possible, focusing on the long-term success factors of each business rather than short-term stock performance. Sizing investments based on their downside risk, not upside potential, is a key strategy for a safety-first mentality.
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