"Doubling down" is something I've been thinking long & hard...

"Doubling down" is something I've been thinking long & hard about lately. I've been adding to my position in fundie PTM for 7 years (ouch). It's easy to look at the market value of 1 position, compare it to your overall portfolio, and think you are adequately diversified in uncorrelated positions. But if that 1 position has a real possibility of going to zero(*), then it may as well be a black hole that (on a cost basis) sucks you dry. So I should have been thinking of my portfolio diversification more in terms of contributed capital (cost) than market value.

(*) Because no matter how good you think a fund manager may be, they are subject to the market gods - and the fickle nature of customers driving fund flows. And even if they don't go to zero, they can drop so far (in terms of business value) that in practice it's still a potential black hole.