Portfolio Theory
Harry Markowitz's 1952 result that spreading capital across imperfectly correlated assets reduces risk without a proportional cut to expected return.
Portfolio Theory
Harry Markowitz’s 1952 paper “Portfolio Selection,” published in The Journal of Finance, formalized something investors already suspected: a mix of assets that do not move in lockstep can deliver a better risk-adjusted return than betting everything on the single asset with the best expected value. Diversification is not hedging out of indecision. It is a mathematical result about variance.
The same logic applies outside finance any time you are allocating a scarce, non-refundable resource (time, attention, runway) across a few bets with uncertain, imperfectly correlated payoffs. A single deep pursuit maximizes expected value if you already know it is the right one. A portfolio maximizes expected value once you admit you do not.