Suppose that industry X is the best industry to be in from a long term income and investment point of view, but that it's volatile in the short term. If the volatility is dangerous to you and you can't accept that level of risk, then diversification of your income and investments is wise.
However, if you have sufficient risk tolerance, e.g., enough money in the bank and time on your hands to survive through the fluctuations, then it is still better to be all-in on industry X for your overall growth. Because it performs better over the long term.
I'm kind of assuming here, for the sake of argument, that you maintain the same income+investment industry mix over time rather than changing it up periodically and trying to beat fluctuations. But, I hope this makes my point more clear.
Stated again, and for the third time: for technical professionals, investment of personal assets in the tech industry carries higher risk than it does for fund managers and other general investors. If you aren't investing with that in mind, you're fundamentally doing it wrong. This isn't a question of "risk tolerance", it's a question of correct mathematics.
I see the income aspect. I realize that a loss of income is costly. I realize that income performance is correlated to the industry it's in and hence correlated with stocks in the same industry. That's the whole basis for the discussion and I see that. Jesus!
I see that, and I still disagree.
This is where both approaches can be right and this is the whole point I have been trying to make. For the sake of argument, suppose you have a trillion dollars in the bank and therefore infinite risk tolerance. Suppose also that your income is 100k. At this point, temporary loss of your income, which can also be reduced by unemployment pay, is wholly inconsequential compared to maximizing your gains in the stock market. If the tech sector pays back at 20% y/y (average) and the next best sector only pays back 5%, absolutely it's better to be in the tech sector even though your income comes from that. My example is unrealistic, but it serves a point: mathematically, it works. So the question is then how much risk (i.e. volatility) can you take in pursuit of maximizing returns? If you have a lot of assets, plenty. If you have no assets and therefore no risk tolerance, obviously diversifying your income from your investments is a good idea. But crucially, whether or not same-sector income/investment is a good idea all depends on how much risk (i.e. volatility) you can take.
Would you suggest Steve Jobs shouldn't have held Apple stock? I think it worked out pretty well for him.
But the grandparent post was making a point about risk analysis that you seem to have missed. Because we are (presumably) already employed in the tech sector, we are already exposed to risk in that sector, even with nothing in our portfolios. A tech downturn is going to impact us disproportionately already, so adding exposure in our investment portfolios is adding extra risk in a way that it is not for a more typical investor.
That doesn't mean "don't invest in technology", but it does mean that you need to be more careful about how you reason about it and not just brush the decision off as your willingness to "accept some level of risk."