There are two points in @zygo23554
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"Diversification is refuge of those who not willing to put hard work "
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" I am yet to meet someone who created wealth through diversified approach"
These are totally wrong and misleading statements . I have quoted large successful investors who have adopted diversified methods right through their career ( irrespective of size of funds ) . I have personally become financially independent by adopting this strategy .
The key is to understand while diversified strategy works well for most of the value investors ( who follow quantitive measures like PE , P/s , Dividend yields etc ) ,
Concentrated investing works in long term only if you have insider info of firm or industry
Now coming to points like SIze does Matter . Yes it does , but that does not explain why these large investors were diversified investors during their early stage also . Remember even Buffet took concentrated position like in Dempster only when he could control management … or get a board seat otherwise he was as diversified as the rest .
On 3% allocation becoming 5 baggers case --> You have to remember 15% allocation in a stock that loses 50% value can be big HIT to portfolio also . Downside risk protection is a bigger goal for value investors as compared to RETURN.