I wrote up why diversification is not really about the number of stocks you own

hey, I’ve been thinking a lot about the diversification vs concentration debate. The discussion usually gets stuck between “own 20-25 stocks and you’re diversified” and “just concentrate in your best ideas,” which feels too simplistic. So I wrote up a piece trying to separate the different reasons investors diversify. The main idea is that diversification is not really about counting positions. It is about counting risks. Two portfolios can both own 10 stocks, but one can be genuinely diversified while the other is just one economic bet repeated 10 times. I also tried to connect it with expected value, position sizing, Kelly, and compounding. The part I find most interesting is that diversification does not magically increase expected value. If you buy bad investments, owning more of them just means losing money more smoothly. What diversification can do is change the distribution of outcomes: reduce the chance of large simultaneous losses, reduce dependence on one scenario, and help capital compound without getting hit too hard by one bad assumption. I also added some simple examples and charts showing how two portfolios can have the same expected value but very different long-term compound results. wrote it up here if anyone’s interested: [https://www.jeravalue.com/en/blog/diversification](https://www.jeravalue.com/en/blog/diversification)