Would you bet on a one-horse race
“My father was a gambler who one day heard about a race with only one horse in it. So he bet the rent money. Halfway around the track the horse jumped over the fence and ran away.”
Academics rave about the benefits of diversification. spreading your bets as much as possible. I believe that if you are sure about something, it is beneficial to invest as much as you can in it, and not spread your investments across average investments.
As a practising investor, I like to concentrate my investments into those stocks that I really understand well, and which I have purchased at a phenomenal value, with the best chance of growing big. However, uncertainty exists in the universe. So while concenteration will produce superior returns if done well, some diversification is absolutely necessary. Events that we can never imagine can happen, like in the story above.
So focus your investments, with some spreading around. My ideal balance is to have 5-10 stocks in my portfolio. More than that if I find amazing deals, but definitely not more than 20% of my portfolio even in something that would look like a 100X gain at low risk.
Always survive, even if really really hard luck hits you. Stay in the game, it does not matter how good you can be, if you get kicked out permanently by hard luck.