The specific risk of a stock isn't of much concern for investors because they can easily eliminate this risk through diversification. This is also why specific

The specific risk of a stock isn't of much concern for investors because they can easily eliminate this risk through diversification. This is also why specific risk is not compensated for by higher returns: only non-diversifiable risk such as market risk carries a risk premium. Of course this is a quantitative perspective that is not shared by high concentration discretionary investors like Buffet. Buffet needs to pick stocks with low idiosyncratic risk because he is not being paid a risk premium for it.