On paper, it was textbook portfolio construction.
Thirty-four listed securities. Exposure across sectors. A long-standing belief in Jamaican corporate champions. A disciplined investment mandate centered on domestic equities.
And yet, for the twelve months ended December 2025, Mayberry Jamaican Equities Limited reported a staggering US$31 million net loss, compared with a loss of just US$887,000 the prior year. In the December quarter alone, the company swung from a US$758,000 profit in 2024 to a US$5.2 million loss in 2025.
The primary driver: unrealised losses on fair value through profit and loss investments, compounded by a severe markdown in one of its largest holdings — Jamaica Broilers Group.
For investors across Jamaica and the wider Caribbean, the episode offers a hard truth:
Diversification is not protection.
Concentration is not conviction.
Risk management is everything.
The Anatomy of a Collapse
The 2025 financial year was punishing for equity investors. Soft market conditions led to US$4.5 million in unrealised losses in the December quarter alone, compared with US$1.6 million in fair value gains in the same period the year prior.
But the structural damage went deeper.
Mayberry held approximately 59 million shares in Jamaica Broilers, making it one of its largest positions. When Jamaica Broilers disclosed significant accounting irregularities in its U.S. operations — leading to restated financials and over US$45 million in reported losses — its share price fell more than 50% from its 52-week high.
The market repriced the stock.
Mayberry’s balance sheet absorbed the shock.
The result: nearly US$900 million in unrealised losses tied largely to that single holding.
Thirty-four stocks.
One outsized exposure.
A multi-billion-dollar loss.
Diversification vs. Concentration: What Investors Get Wrong
In theory, diversification reduces risk by spreading capital across uncorrelated assets. Concentration, by contrast, increases potential return — and risk — by placing larger bets on fewer ideas.
Diversification
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Spreads risk across sectors and issuers
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Protects against idiosyncratic shocks
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Typically reduces volatility
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Often caps upside in bull markets
Concentration
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Amplifies gains when correct
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Magnifies losses when wrong
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Requires deep due diligence and active monitoring
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Demands strong governance awareness
The fatal flaw in many Caribbean portfolios is what I call “false diversification.”
Owning 30-plus securities does not guarantee risk dispersion if:
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The top 3 holdings represent a disproportionate percentage of NAV
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The companies share similar macro exposures
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Governance oversight is assumed rather than scrutinised
Diversification without position discipline is not diversification. It is clustering risk with cosmetic breadth.
The Governance Blind Spot
The collapse in valuation tied to Jamaica Broilers was not triggered by cyclical weakness. It stemmed from accounting irregularities, inflated assets, and hidden losses in U.S. subsidiaries over several years.
That is governance risk — and governance risk is notoriously difficult to diversify away if your largest position carries it.
Institutional investors often focus heavily on earnings growth, dividend track records, and market leadership. But history shows — from Enron to Wirecard to regional corporate failures — that governance failures destroy capital faster than competition ever could.
The Caribbean’s capital markets are still maturing. Internal controls, audit rigor, and board independence vary significantly by issuer. Investors who treat blue-chip reputation as a substitute for forensic diligence often pay dearly.
Unrealised Losses Are Real Risk
A common defense is that Mayberry’s losses were “unrealised.”
That distinction matters for accounting — but not for valuation or investor confidence.
Mark-to-market losses:
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Reduce reported net asset value
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Impact earnings per share
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Influence credit capacity
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Affect investor sentiment
When a stock falls 50%, the opportunity cost is immediate. Recovery is uncertain. Time is not neutral.
Markets do not wait for management optimism.
The Brutal Lessons for Retail Investors
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Know Your Weightings
Do not count positions. Measure concentration. If one stock can move your portfolio 10–15% alone, you are concentrated — whether you own five stocks or fifty. -
Interrogate Governance
Earnings growth without cash flow clarity is a red flag. Complex subsidiaries, foreign operations, and opaque disclosures demand heightened scrutiny. -
Separate Brand From Balance Sheet
Market leaders can fail. Familiar names do not immunise against fraud, mismanagement, or operational breakdown. -
Liquidity Is Risk
Caribbean markets are relatively shallow. When large shareholders sell, price compression can be violent.
The Lessons for Institutional Investors
For pension funds, asset managers, and investment companies, the Mayberry episode underscores deeper structural concerns:
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Position size discipline must override conviction.
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Stress testing must include governance failure scenarios.
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Board representation does not eliminate information asymmetry.
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Dividend history is not a proxy for operational integrity.
Most importantly, portfolio oversight must evolve beyond macro views. In small markets, idiosyncratic company risk dominates macro cycles.
There Is No Perfect Strategy
The investment paradox remains undefeated:
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Concentration builds wealth.
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Diversification preserves it.
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Overconfidence destroys both.
The Caribbean’s next generation of investors must abandon the illusion that one strategy is superior. What matters is:
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Continuous due diligence
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Position sizing discipline
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Governance vigilance
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Risk-adjusted thinking
Markets reward conviction — but only when paired with control.
Businessuite Final Word: The Strategy Is Not the Safeguard
Mayberry Jamaican Equities did not collapse because diversification failed.
It stumbled because risk concentration and governance exposure outpaced risk control.
For investors across Jamaica and the wider Caribbean, the lesson is as old as Wall Street:
It is not how many stocks you own.
It is how much you can afford to lose in the one that goes wrong.
And one always will.
The Governance Discount: When Oversight Failures Destroy More Value Than Markets Ever Could
