Why does Pershing Square favor heavy portfolio concentration over broad diversification?

Broad diversification makes sense when an investor lacks granular insight into specific businesses, but for experienced investors, it dilutes capital away from best ideas. Unlike parenting, where you do not rank your children, investing requires rank-ordering risk and expected return. Holding beyond a dozen or fifteen positions yields negligible diversification benefits while penalizing overall returns. Concentration allows us to allocate capital heavily into our highest-conviction holdings.