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Chris DeMuth Jr.
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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
My blog:
Rangeley Capital on Harvest
My book:
Rangeley Capital Best Investment Ideas
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Comments (21)
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  • bazooooka
    , contributor
    Comments (2353) | Send Message
     
    The amazing part is the lack of draw down. Most with your kind of performance had to suffer some kind if risk along the way. Great work.
    23 Mar 2013, 04:25 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » Thanks; so far so good. I have a new piece on Monday about GKK and another on OUTD. I am in process on a third regarding PCS...
    23 Mar 2013, 04:43 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
     
    This is amazing. In a few decades, when I'm an accredited investor... you will be getting an email and a very large check from me.
    23 Mar 2013, 05:16 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » Thanks! Meanwhile, you'll get the ideas shipped your way. I'm squirreling away on a couple now.
    23 Mar 2013, 06:26 PM Reply Like
  • Wilson Wang
    , contributor
    Comments (818) | Send Message
     
    Wow, awesome stuff.

     

    Do you have a concentrated portfolio or a diversified one?

     

    And how's your YTD performance for 2013? If you don't mind me asking. =]]
    23 Mar 2013, 06:09 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » Statistically, it is pretty diversified. However, we achieve that with fewer positions that conventional money manager, because the individual ideas are not correlated with the broader market. It makes sense if you look at what the ideas are (say, for example ABCP, a litigation that was a core position last year).

     

    YTD performance for 2013 is fine (have not yet shared it with our investors, so certainly not going to discuss more broadly).
    23 Mar 2013, 06:28 PM Reply Like
  • Wilson Wang
    , contributor
    Comments (818) | Send Message
     
    Most definitely!

     

    Great performance, and I hope you continue strong!

     

    I had another question real quick,

     

    What's your view on diversification? I particularly find it extremely unattractive.

     

    But I love the fact that your company selections are uncorrelated with the markets, and their performance completely relys on the management's execution, or the special event.
    23 Mar 2013, 06:38 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » I think that most of the advantages of statistical diversification can be attained with eight or nine positions. Also, there is a practical problem that we spend a fortune on research, months of our time, and a lot of energy on each idea. So, in practice, I run out of resources after a dozen ideas or so. I track several hundred securities at any one time and I'm picky. Only about 1% makes it into our portfolio. If one is very price-sensitive and is highly selective, it is limiting on diversification. Next time someone tells you that they have three hundred positions, ask them for their three hundredth best idea and what separates that from their three hundred and first. I doubt one will find a substantive answer.
    23 Mar 2013, 06:43 PM Reply Like
  • Wilson Wang
    , contributor
    Comments (818) | Send Message
     
    Thank you for that!

     

    Do you limit yourself on a particular idea (%of your portfolio)?

     

    I am having such a hard time with that, because when I find a good idea, I have the damn urge to put 30%-45% of my managed portfolio in it.

     

    Can you give me some feedback on that?
    23 Mar 2013, 06:53 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » We limit ourselves in terms of using quite careful, conservative premises and then we limit ourselves in terms of buying securities only close to their downsides, relative to their upsides. However, if our conclusion, despite care, caution, and a need to under pay, is that we should take a concentrated position, then we do. In practice, ideas have to compete against other ideas for capital, so they are rarely over 10%.
    23 Mar 2013, 07:00 PM Reply Like
  • aretailguy
    , contributor
    Comments (1017) | Send Message
     
    Chris, quite amazing. GCVRZ got no bounce this week off news regarding a near 50% distribution. Is Wall St. so dense that they will wait for the formal announcement?
    23 Mar 2013, 07:14 PM Reply Like
  • johncworth
    , contributor
    Comments (424) | Send Message
     
    aretailguy, could you throw me a link re the distribution? I am holding several thousand shares of this and am always interested in news. Many thanks, jcw
    24 Mar 2013, 01:17 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » The newest on GCVRZ is in the recent comment section here:

     

    http://seekingalpha.co...
    24 Mar 2013, 07:55 AM Reply Like
  • johncworth
    , contributor
    Comments (424) | Send Message
     
    Thanks Chris.
    24 Mar 2013, 09:23 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » In this case, yes. The market overall is not that interested in GCVRZ. Also, it missed the first unrelated milestone, so there is a harshly negative Pavlovian reaction which will survive until the next milestone is actually reached. But it will gain a lot then. In fact, the CVR might actually trade fairly flat from here, even after distributing $1. I have no hopes or confidence in the market's hopes or confidence in GCVRZ. But Lemtrada's approval by the FDA? That I think will probably happen.
    23 Mar 2013, 07:19 PM Reply Like
  • gsterling
    , contributor
    Comments (552) | Send Message
     
    Is your fund actually still opened to new investors?
    23 Mar 2013, 09:28 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » I am happy to take specific questions of this sort offline with qualified investors. But to give a general answer, Rangeley Capital is 49% internal capital and 51% external limited partners.
    24 Mar 2013, 10:31 AM Reply Like
  • CBOE Trader
    , contributor
    Comments (108) | Send Message
     
    good question.Any minimums
    where do i find your historical performance and holding for that time period do u trade your positions based on technical data
    do u
    have u an opinion on commodity investments in general
    23 Mar 2013, 10:18 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » Thanks for the questions. You will receive answers to such questions directly.
    24 Mar 2013, 10:32 AM Reply Like
  • Landon R
    , contributor
    Comments (6) | Send Message
     
    Hi Chris:

     

    Forgive the bluntness and scope of my question, but... of your long positions listed here, which (one, perhaps all) do you view as worthy of initiating a long position at this point? Or, if the answer to the first question is obvious, which do you view as yet most opportune?

     

    I should note that I began to follow GKK as a result of your writing a couple of months ago, and staked out a position immediately I was so impressed, and I've been quite pleased.

     

    Thanks for your thoughtful and insightful writing on Seeking Alpha. I am an avid reader of yours.

     

    Sincerely,
    -Russell
    26 Mar 2013, 03:13 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4040) | Send Message
     
    Author’s reply » That is the correct question since some, especially SSE, have essentially run their course. Others, such as LORL, still have catalysts ahead. So, to answer your question: LORL has the most ahead as the idea in my article has not yet happened (more here: http://seekingalpha.co...). GKK, as described in a new article this week (http://seekingalpha.co...), is probably half way done. I hope that helps answer your question.
    26 Mar 2013, 07:22 AM Reply Like
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