Search
Get in touch!
Linkedin X-twitter Envelope

François Rochon: Quality over Diversification

In this recent interview, François Rochon, founder of Giverny Capital, shares his insights on optimal portfolio strategy. François emphasizes a balanced and disciplined investment philosophy that prioritizes quality over excessive diversification.

Below are the key takeaways from his strategy:

  • Optimal Portfolio Size: Rochon advocates for owning 20 to 25 high-quality stocks. This range strikes a balance between diversification and concentration, offering protection against significant losses while maintaining the potential to outperform market indices.
  • Focus on Quality Over Diversification: While diversification is important, Rochon stresses that it should not come at the expense of quality. He recommends focusing on great companies rather than spreading investments across mediocre ones just to achieve diversification.
  • Avoidance of Certain Sectors: Rochon’s firm avoids sectors like commodities and natural resources due to their lack of competitive advantages and pricing power. Similarly, he steers clear of heavily regulated industries such as utilities and healthcare segments tied to Medicare or Medicaid, citing their unpredictability.
  • Simplicity and Discipline: His strategy revolves around keeping things simple by investing in outstanding businesses, maintaining a manageable portfolio size, and avoiding sectors with inconsistent profitability. This approach ensures both peace of mind and room for portfolio growth.
  • Balanced Investment Philosophy: Rochon’s method highlights the importance of finding a middle ground between extreme concentration and over-diversification, combining prudent risk management with the pursuit of long-term success.

Click here to go to the external source.

Share the news

Disclaimer of liability

The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk

You might also find this interesting:

Karen Karniol-Tambour: Today’s Radically Different Market Environment

May 13, 2025

In this Bridgewater Associates interview, Co-CIO Karen Karniol-Tambour discusses the firm’s latest outlook on the global economy, the investment landscape, and the urgent threats facing portfolios. The conversation centers on the shift to a new era of “modern mercantilism,” the implications for US assets and the dollar, the rising risk of recession, and the role of technological disruption, particularly artificial intelligence (AI).

Warren Buffett: Its Time To Pass The Torch

May 13, 2025

Warren Buffett, legendary investor and longtime leader of Berkshire Hathaway, has announced he will step down as CEO at the end of the year, with Greg Abel set to succeed him. Buffett, who will remain as chairman, made this announcement in a surprise move at the conclusion of the Berkshire Hathaway annual shareholders meeting, marking a significant transition for the company he has shaped for decades.

Counterpoint Global: Investing in Second-Order Effects of AI

May 13, 2025

Artificial intelligence (AI) and automation are rapidly transforming the business landscape, with profound implications for companies, workers, and investors. In their April 2025 report, Morgan Stanley’s Counterpoint Global explores how the adoption of these technologies is driving efficiency, reshaping workforces, and creating new investment opportunities-especially through “second-order effects.”

Aswath Damodaran: Dangers of Contrarian Investing

May 6, 2025

In his recent blog post NYU professor Aswath Damodaran examines the popular investment advice to “buy the dip” – that is, to purchase stocks or markets after sharp declines. He explores the various forms of contrarian investing, the historical evidence supporting and challenging these strategies, and the psychological demands required to succeed as a contrarian investor. Aswath urges investors to approach contrarian strategies with caution, discipline, and self-awareness, rather than simply following the crowd or relying on historical averages.