Concepts
Concentrated Portfolio
Portfolio built around a small number of large individual positions rather than broad diversification.
A concentrated portfolio puts a large slice of capital into a handful of carefully chosen positions — it is not unusual for the top five holdings to account for more than 50% of total value. Advocates such as Warren Buffett or Charlie Munger argue that deep conviction in a few exceptional companies produces superior long-term returns.
Concentration is immediately visible in 13F comparisons: on Whaleboard, the share of total portfolio held in the top ten positions captures how concentrated each fund is. Pershing Square (Bill Ackman) and Scion Asset Management (Michael Burry) are textbook examples of extreme concentration.