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Odd Lots: Krishna Memani on Wall Street's Very Expensive 'Free Lunch'

Odd Lots: Krishna Memani on Wall Street's Very Expensive 'Free Lunch'

Bloomberg30-05-2025
We're told over and over again that the one "free lunch" in investing is diversification, and that you can improve your returns over time simply by investing in a wider range of assets. This is textbook modern finance. And yet over the past several years this hasn't been the case. An investor would have done great just by investing in US stocks (with the occasional hiccups.) What's more, even within US stocks, investors should have concentrated on big tech stocks. Going long US tech has been identified as the most crowded trade by investors for years, and yet most of the time it has outperformed almost everything else. So what are the lessons from this story? And is now the moment where international diversification is going to work? On this episode, we speak with veteran portfolio manager Krishna Memani, who is now the CIO at Lafayette College. Previously, he was the CIO at OppenheimerFunds, which got bought by Invesco. We talk about portfolio theory, the tragedy of the prudent international investor over recent decades, and whether that realized returned we've seen across a range of asset classes should prompt a fundamental rethink of finance theory.
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