My tuppence, ha-penny's thought on portfolio construction is that it is largely a moot debate given the distortions brought about by taxation consequences.
When one operates one's investment activity in an environment where investing profits are subject to taxation [*], and one invests with after-tax investment returns in mind (and one should) then the notion of portfolio concentration becomes quite an imponderable one, more so the more successful one invests.
For example, if one acquired CSL twenty years ago, the capital gains consequences of selling out of that stock today would be so significant, that the incremental return that would be required from the stock that would replace CSL in the portfolio, would almost surely be prohibitively high.
It stands to reason that the longer one owns shares in good quality businesses, whose values increase over time, the more one can't "afford" to sell those stocks because the ensuring capital leakage to tax would be excessive.
As a result, it occurs to me that - unless one runs a fund registered in some tax-free domain - it is unavoidable that stock number creep in an investment portfolio naturally occurs over time.
It's a problem for which I have not found a solution.
[*] Philosophically, I believe investing profits should be subjected to taxation, but that's a separate debate.
PMP Price at posting:
22.5¢ Sentiment: None Disclosure: Not Held
(20min delay)