Hello Barry,

Thank you for contributing to the conversation. I appreciate you taking the time to comment on the piece.

I meant exactly what I said...investment managers manage multiple portfolios; chief among them are the securities portfolio, and the human resources portfolio responsible for making the security selection decisions. The idea of maximizing returns and minimizing risk through diversification is not just a technology deployed in investing. Simply looking throughout the natural world you also see that success is maximized through diversification. Looking at entities employing large numbers of people, from corporations, to governments, to militaries, you also see that success is dependent on diversification. In the military, there are not just bombers, but fighters, interceptors, cargo haulers, gun ships, electronics platforms, helicopters and so forth. This is a diversification of the portfolio of planes designed to handle a diversity of problems that might need addressing.

Diversity is a noun, meaning the state of being diverse. Diversification is a verb and the act of achieving diversity. In investing we normally think of only one portfolio, the securities portfolio. So we tend to anchor toward diversification as an idea applied in a securities context. I am simply pointing out that diversity as a goal should apply in each portfolio.

Next, there is mixed research demonstrating the benefits of gender diversification in the human resources portfolio. Some of the studies point to additional return, or minimized risks. Other researchers do not find comparable statistical significance. No study to my knowledge has shown that adding women to the male dominated world of portfolio management is a negative. Because of the mixed results I chose to include other examples of a lack of diversification in the human resources portfolio. In my piece I chose to also focus on race and education. To my knowledge no one has sought to measure the benefits to return and risk for investment managers when seeking diversification in their human resources portfolio where race, and educational background are specifically measured. However, I have experience managing portfolios of securities and people and believe there is ample evidence of the benefits of diversification within the human resources portfolio. My preferred source of diversification to focus on is the educational background of people, both formal, and informal. I would love research to be conducted in this space. I know that you have a preference for statistical methods. So I urge you to begin collecting data at the conferences you attend and within your consulting gigs. Count the number of non-white Ivy League educated males in your audience. I believe you will find a paucity of diversification. Now this is correlation strictly: negative alpha and low diversification in the HR portfolio. I am in my piece implying causation, but, as you know, causation in social sciences is difficult to prove. However, I have no problem asking my readers to make a leap of faith.

Yours, in service,

Jason