Modern portfolio theory, with its emphasis on investment diversification across geography, sectors, and capital markets, certainly has its adherents.

I'm not one of them. At best, I consider MPT a strategy for preserving purchasing power over time.

My goal is to build wealth, and to do that I must concentrate my investments, and if capital is low, perhaps leverage them as well.

Peruse the Forbes 400 list; most members created wealth with concentrated investments (both public and private).

Consider the number one guy, Bill Gates. The cynosure of his wealth during its formative years was Microsoft (MSFT), not a diversified bundle of Microsoft shares, real estate, Vanguard's S&P 500 Index fund, Treasury bonds, and commodities.

Number two on the list is the omniscient and equally-concentrated Warren Buffett, who swelled Berkshire Hathaway's (BRK.A) coffers in the 1980s with a small cadre of Wall Street castoffs, rarely owning more than 10 issues at a time.

Much has been written about Buffett's legendary penchant for concentrating his purchases, and the amazing successes that came out of it. He wasn't alone. Kirk Kerkorian and Carl Icahn also become billionaires by concentrating their positions as well. In the 1980s, Kerkorian ballooned his fortune by purchasing large equity positions in Chrysler and MGM Studios. Icahn did the same with Texaco and United States Steel (X).

Investors with less chutzpah than Kerkorian and Icahn will be better served adopting Buffett's more passive tactic of investing in tough-to-crack franchises. In today's environment, Proctor & Gamble (PG), U.S. Smokeless Tobacco (UST), and McDonald's (MCD) fit the bill. All three are leading, profitable companies with dominant market share and nearly impenetrable brand names.

But my two favorite tough-to-crack franchises are Altria (MO) and ExxonMobil (XOM). Few brands in the world are more dominant than Altria's Marlboro cigarette, and few companies are as consistently as profitable. Despite continual litigation from anti-smoking fanatics and repentant smokers, Altria increases its dividend annually and appreciates its stock consistently. Over the past 55 years, Altria's stock has averaged a near-20 percent annual return.

Another consistent performer, ExxonMobil has paid a dividend for the past century, increasing it annually for the past 25 years. The oil leviathan is a proven, if not dexterous, money-maker, making the stuff regardless if oil is $11 or $75 a barrel. Such long-term, demonstrable business acumen is why ExxonMobil has produced average annual returns of nearly 14.5 percent for the past 50 years.

A concentrated investing strategy isn't for everyone – patience and fortitude are musts; volatility is guaranteed. Consider that, in late 2005, Kerkorian sold a fifth of his $1.7 billion General Motors (GM) stake after it lost a third of its value. But In early 2006, he purchased 5 million shares on the open market and privately transacted for an additional 7 million shares. Today, Kerkorian's investment is back in the black, demonstrating once again that tolerating a little volatility in a concentrated portfolio is often highly remunerative.

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