Innovation Week is over, accounting is a few weeks from now, the sports tournament is just behind the corner, and a long weekend awaits. Yet, something else is on our mind: portfolio diversification.

As someone with a non-business background, I did anticipate a struggle with Finance. It was a world which felt foreign to me not so long ago. I went through the first three chapters of the Finance book, which were given as a pre-work assignment. This left me prepared to grind through the course that was about to start. Little did I know that I would find the subject not only fascinating but also relatable and enjoyable.

Professor Salvatore Cantale has done a solid job laying down the foundations. Module 1 gave us the sets of rules and tools that build upon each other to create more sophisticated concepts. Additionally, and what’s most important, we discovered that money has another dimension—time. Professor Arturo Bris is now taking the whole thing to the next level in Module 2.

On the fun side, we have learnt what investment advice to expect from the professor’s extended family and the number of digits in their IQs, and how many Finance Nobel prize winners he has managed to touch so far. But we’ve also learned about risk and uncertainty, the efficient frontier—a core concept in modern asset management, efficient portfolios, and diversification.

As a retail investor with a portfolio of stocks and some common sense, I followed a few well-known rules of thumb and occasional advice of people. However, I never had the chance to learn what’s really behind those rules. I could explain, for instance, diversification in layman’s terms: “don’t put all your eggs in one basket.” What lay beneath that explanation was beyond my reach.

In fact, the real reason stayed beyond my reach until last Monday afternoon. On this day, Arturo started his lecture, saying: “it is all about correlation, stupid!” A few slides more, and it all clicked into place. The pieces of the puzzle came together, and it all started to make sense.

I could not imagine a better thing to learn that day. And it got better on Tuesday – the capital asset pricing model and the weighted average cost of capital. Sounds boring? Not with Arturo, who manages to keep his audience not only awake, but alert, entertained, learning, and thinking about portfolios and diversification instead of the long weekend about to come.

Relatable, fascinating, and enjoyable learning. And, what’s most important, we are learning how to make better decisions, an essential part of #CentumFortes leadership journey.

Dmitry Makarov

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