Value investing can appear to be quite easy: thoroughly analyse a business and its risks and then ensure the price paid offers an adequate margin of safety. Many advocates postulate that because the analysis has been thorough and a margin of safety has been incorporated, intelligent investors can then concentrate their capital in their best ideas (“Why invest in your sixteenth best idea?”). However we highlight reasons why even seemingly-diligent analysts can make poor investment decisions that could prove catastrophic in a concentrated portfolio.

Click below to see the full dcoument in PDF: