Alpesh B Patel explains why diversification matters in modern crashes: downside correlation across global markets has risen, making single stocks risky. He holds 2.5% in Micron within a 40-stock portfolio, though concentrating fully could have yielded 900% returns. Regulations prevent recommending individual stocks anyway.
I'll tell you because I got no skin in the game. I'm not a stockbroker trying to sell you stocks. I'm not a newsletter writer trying to sell you a subscription. I have no subscriptions. I have no fund trying to sell you fund management, IFA, wealth management fees, subscription fees, none of it. Okay? So I have no interest in trying to drag you along and saying to you, no, don't go into cash. You didn't know this concentration of correlation to the downside. That's how stock markets crash because everything— the only way to avoid then stock risk is to be out of the damn thing. There you go. So, these things happen with retail clients. They go, "Well, we shouldn't be in the same sector." In the 1960s, you were right. And the 1960s knowledge is what IFA has learned. In the 1960s, China sneezes, we don't get COVID in the 1960s. In the 1960s, ICI, Imperial Chemical Industries, was different to British Airways. Now, US stocks drop and Chinese companies can drop, right? We're more interconnected. So, all the things you thought were true Ain't so, and we know that from the data and the increase in correlation to the downside. Right, so what do I happen to own? Well, I wish I owned all of that, but I didn't, 'cause I would've made bloody 900%. I'd be a legend. But I said, put all your money in Micron, but I didn't. I said, it's in our Quality 5+ portfolio of 40-odd securities. I have about 2.5% in it originally. Now it's obviously gone up, so I need to rebalance it back down. But if I was clever, and you should say this, Alpesh, you're not that clever. If you're that clever, you would've told us to buy that and nothing else. I never told anybody to buy that and nothing else. Well, first of all, I couldn't tell you to buy that and nothing else. Otherwise I'd be breaking the law.
