richner capital is an investment partnership that invests in publicly traded companies. The goal of the partnership is to maximize our investors’ returns while minimizing downside risk. The partnership achieves that goal by using a value investing approach in which we seek fifty-cent dollars.
In the financial markets, price is what you pay but value is what you get and periodically, price and value diverge enough giving one the opportunity to buy something for a fraction of its fair value: a fifty-cent dollar. The lower the price is versus the value, the higher the margin of safety, a fundamental tenet of value investing. For example, if we buy a business for 50% of its fair value we attain a comfortable margin safety with an upside of 100% as eventually the market price closes its gap with fair value. These are the opportunities on which we patiently capitalize, delivering not only respectable returns but also limiting losses.
Using the aforementioned principles, our portfolio contains about a dozen companies. This guarantees that our research process is not too thinly spread and we understand each investment in-depth. Common knowledge dictates that diversification reduces risk however it also reduces upside by diluting the performance of successful investments. By avoiding over-diversification we reap the benefits of our best ideas. A dozen holdings will give us enough diversification given the names not be too correlated to each other.