Concentrated Positions

Betting all of your money on one horse sure is exciting. You might make a lot of money, but your horse could also finish last. 

Investors in places like Lucent, Enron, and WorldCom have experienced that pain of a concentrated bet.

We’ve helped many clients through the psychological and tax costs to reduce their risk. Creative techniques exist for dealing with concentrated positions. There are pros and cons to all hedging strategies. Some are very complex others are fairly straight forward. The best answer is often the combination of these strategies that allow you to sleep at night. 

Pharmaceutical Quarterly - Concentrated Positions - February 11, 2009