Brar Investment Capital to Use Proprietary Checklist in Launching Fund - Article

[smreitz]

Thought this was an interesting article on new fund to be conducted with a value investing philosophy:

 

“Prior to investing, we try to ’kill‘ the potential investment by running it through a 90 item investment checklist that is based on learning from the mistakes of great value-oriented investors such as Warren Buffett, Charlie Munger, Bruce Berkowitz, Seth Klarman, Mohnish Pabrai, Peter Lynch and more. This helps to rationalize our decision making and reduce risk,” said Pope Brar, Managing Partner and Founder of Brar Investment Capital LLC.

 

To avoid the permanent loss of capital is our primary concern,” stated Pope Brar.

 

The fund is suited for investors looking for capital appreciation through a concentrated portfolio of value oriented and special situation investments such as spin-offs, post-bankruptcy listings, restructurings, and rights offerings.

 

“In addition to reducing risk, investors are looking to grow their capital on an absolute basis and want to avoid investing in larger funds that closely track their benchmarks and deliver miniscule returns. One of the best ways to appreciate capital is by investing in a fund that concentrates holdings in a few names and reduces risk by continuously stress testing its investments by studying the mistakes of history’s greatest investors. Idea number 50 is unlikely to add more value than idea 20,” said Brar.

 

Brar Investment Fund LP will be available to accredited and qualified investors starting November 20, 2013.

 

Original Article:

 

http://www.prweb.com/releases/2013/11/prweb11315909.htm

 

Comments? Anyone have an opinion on Bhupinder “Pope” Brar's past?

[Palantir]

People keep saying that "permanent loss of capital" is the main risk. How often does that actually happen though with equities? Doesn't seem to be a very robust measure.

[JBird]

I think idea number 7 is unlikely to add more value than idea number 6. All in all, I think he'll do fine. Thanks for posting.

[Parsad]

At the end of the day, results are all that matter.  Whether you have a checklist, no checklist, internal checklist or any other tool.  Cheers!

[Peregrine]

People keep saying that "permanent loss of capital" is the main risk. How often does that actually happen though with equities? Doesn't seem to be a very robust measure.

 

It's true that stock prices frequently go up and down, making seeming gains and losses transitory. By my understanding, permanent loss of capital arises when you make a mistake, i.e. it's the risk of making a mistake and these mistakes generally happen when you get yourself into something that you don't truly understand. It's subjective and not something that can be measured as easily as beta.

[sigis]

Seems like another example of a good idea taken to the extreme. I seriously doubt Charlie Munger's checklist is half as long as these guys.

[Mephistopheles]

Doesn't Mohnish have a checklist just as long, if not longer? And he's said that results have been great since he started using it.

[stahleyp]

Doesn't Mohnish have a checklist just as long, if not longer? And he's said that results have been great since he started using it.

 

I think his is also about 90-100 or so. Keep in mind, I think (I could be wrong here) he just started using it in 2009 or 2010. He's an awesome investor but it hasn't really been put through a terrible market.

 

have any of you guys even heard of this company? I can't say that I have. I just find it kinda strange they're releasing a press release for a new fund (especially if they don't have any other funds). It seems like it's just slick marketing. But hey, maybe I'm wrong and this guy is proven.

[JBird]

It's true that stock prices frequently go up and down, making seeming gains and losses transitory. By my understanding, permanent loss of capital arises when you make a mistake, i.e. it's the risk of making a mistake and these mistakes generally happen when you get yourself into something that you don't truly understand. It's subjective and not something that can be measured as easily as beta.

 

A permanent loss of capital occurs when an investor's aggregate after-tax receipts from an investment-- including those he receives upon sale-- give him less purchasing power than what he had to begin with. It's easy to measure and isn't subjective.

[Palantir]

^That's really no different from volatility, but merely looking at one side of the distribution.

[Peregrine]

It's true that stock prices frequently go up and down, making seeming gains and losses transitory. By my understanding, permanent loss of capital arises when you make a mistake, i.e. it's the risk of making a mistake and these mistakes generally happen when you get yourself into something that you don't truly understand. It's subjective and not something that can be measured as easily as beta.

 

A permanent loss of capital occurs when an investor's aggregate after-tax receipts from an investment-- including those he receives upon sale-- give him less purchasing power than what he had to begin with. It's easy to measure and isn't subjective.

 

Hmm, I apologize for not phrasing that correctly. I meant that the risk of permanent loss of capital is subjective and difficult to define.