George Athanassakos | A value investor’s take on diversification and risk

In his op-ed for The Globe and Mail, Professor George Athanassakos provided a value investor’s approach to the two primary principles of modern portfolio theory: diversification and risk. 

Athanassakos explained why value investors have concentrated portfolios, not because they reject diversification, but because they select only securities they understand and prefer companies with stable cash flows and a history of steady earnings.

“Value investors want to ascertain that a company has the ability, financial and operational, to withstand adverse states of the world and ‘sustain pain’,” he said.