Philosophy
Maxiplan LLC specialises in the purchase of quality securities, predominantly Investment Grade Rated Bonds, thus assuring safety of the invested funds. As a first distinguishing feature, Maxiplan LLC is a private company and not a managed fund. This structure has critically important implications for its operations. Unlike a managed fund or unit trust structure, organisation as a company facilitates direct investment operations as a Principal. The focus of attention is not upon fluctuations of prices of investment securities from week to week, month to month, etc. Rather, the Company makes profit from the difference between buy and sell value of assets or the difference between asset returns and their holding costs. After they are purchased and until they are sold, the current market prices of the assets owned by Maxiplan LLC are irrelevant. These prices and their day to day, week to week and month to month fluctuations affect neither Maxiplan’s Profit & Loss statement nor its Balance Sheet; accordingly, they do not affect the measurement of Maxiplan’s results.
Conversely, 99% of market participants obsess about market prices and their day to day changes. They do so in no small part because the unit trust structure of the vast majority of investment vehicles encourages them explicitly as well as implicitly to do so.
The difference between Maxiplan’s simple methods and institutional investment managers and unit trust structures is stark. With very few exceptions, it appears that investment managers typically shoulder relatively little investment risk and yet obtain much of the reward from the management of other people’s money. Moreover, unlike Maxiplan, they seldom seem to invest substantial amounts of their own capital in the funds that they manage, and virtually always charge management fees regardless of the results which they obtain for their investors. Because, in effect, they do not eat their own cooking, other investment managers have surprisingly little incentive to cook well. That is one reason why surprisingly few of them do well for their investors. In contrast, Maxiplan LLC provides strong reasons to invest conservatively and for the long term. The Company was established as a vehicle to safely invest own funds as well as private clients’ funds, to preserve and build wealth, not to aim for extremely high returns which inherently entail high degree of speculation and risk of loss of capital invested.
Unlike most other investment managers, Maxiplan LLC sticks resolutely to basics. It does not use instalment or other warrants, call and put options, futures contracts and other esoteric and speculative and dangerous derivative financial instruments. Nor does Maxiplan LLC borrow money. These constraints will cause the Company to forego what others might regard as exciting opportunities. They might also penalise its long term results. At the same time, however, they significantly reduce the risk to shareholders’ and clients’ capital whilst still providing reasonable returns.
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All investments should be made only by sophisticated investors or experienced professionals who have independent knowledge of the relevant markets, are able to consider and weigh various risks represented by unsecured investments and have the financial resources necessary to bear, in some cases, the substantial risk of loss of investment.