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Chris DeMuth Jr. is the founder of Rangeley Capital LLC. Rangeley is an investment firm that focuses on event driven, value-oriented investment opportunities. Rangeley Capital and his value investing forum, Sifting the World (StW), search the world for misplaced bets. Rangeley exploits them for... More
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  • Contra Excess Cash 19 comments
    Jul 20, 2013 3:45 PM

    In reaction to Excess Cash: What's An Investor To Do?, I would like to say that you have a problem, but this is a solvable problem. This problem has been stated with increasing frequency in recent months and I am here to help.

    When you are not in a hurry


    With all due respect to sandy sheiks and hip hoppers, boat is short for sailboat. Decks are made from wood, certainly endangered and ideally extinct. It is a little piece of empire: polished, coiled, stowed, pressed whites, gin soaked, and circling the globe. "Ship shape" is a cliché, but a lovely one.

    When you are in a hurry


    Don't get too fussed about planes. Don't talk about them and don't worry about them. Have the wife pick out interior colors and seating. The one thing that matters is the sublime logistics: it pushes you into the back of the seat when you sit down because you sat down. That is what really matters here.

    When you are alone

    Ducati Streetfighter

    In and of itself, this will not do quite as much to help the excessive c-notes. But the wife is guaranteed to express her concern in a superlative new life insurance policy that will.

    When you are not alone

    Aston Martin Vanquish

    With Range Rovers, the older the better and the same might be said of Aston Martins. Few cars as glorious as a dusty old DB6 have been built in the 21st century. Wind tunnels and CAD/CAM ruin everything by way of beauty. At one point, cars could be beautiful because nobody knew any better. Now, we can solve for the correct shape and - damn it - the correct shape apparently is a Japanese rocket. But this one is an exception; also, if you are put off by your over the top cabbage, this will take it down a level. Barely double digit MPG and a mechanic who will send you presents at Christmas will also aid in your lolly reduction surgery.

    Where to go

    Be sure to avoid bagging a beater

    Now that you have adequately arranged for transport, you need somewhere to do. Time for a double gun driven shoot. Fox hunting was a secondary activity invented in order to protect upland game from their nasty predators. Pheasant hunting was literally the sport of kings.

    What to pack

    Holland & Holland Royal SXS

    Sixty-five thousand quid will get you to the starting line. But that is before the delicately named "available optional extras". The "available optional extras" will sort of swirl around your head as measurements are taken, preferences are spoken, and copious notes are taken. But when it is done it will be… perfect. It was made for you and you will know it. Bespoke is a powerful, addictive drug and the Royal side-by-side will turn you into a junkie.

    God willing, if this extra bucks issue is a manageable problem, you're problem will be solved. If however, you remain stuck with a terribly bad case of excess coin, get a wife and a bunch of kids, ideally all equestrians. They can be a great help in a time of need in dealing with your greenbacks. At least one of the little buggers will be getting fed, groomed, housed, transported, or dressed 24-hours per day, all of which will help exorcize the excessive Benjamins that had once been almost stifling in their grotesquely looming piles. But if the bucks keep piling higher and higher despite the above precautions, then you will need to resort to extreme measures: art and philanthropy.


    Really, I promise I'm not joking

    This is a strong, but potentially necessary measure. Skulk around auction houses for long enough and art helpers will show up to give you chipper little pieces of their wisdom. This should utterly obliterate excess dead presidents in increments of many bucks at a time. Unlike with vehicles, homes, or toys, art does not have any limiting principle beyond which it fails to clear up your nasty and potentially embarrassing case of excess lucre. The ducats will simply clear up after a number of days at auction houses. One day you will have accounts stuffed with embarrassing line after line of unwanted and unneeded scratch and the next day, "poof!" and you are free of moola and long one… well it is often hard to know what it is exactly. But the people who sold and insured it said that it is something.

    But your case is a nearly terminal one. Jeff Koons makes the balloon animals at your children's birthday parties but your piles of legal tender are still practically asphyxiating. Were they to fall over, your loot could cause a major avalanche and you would never be heard from again. It is time for extreme measures.

    Just give it away

    I'm serious. Etymologically, philanthropy means "love of humanity". As a side note: do you actually know any real live humanity? And you love it? While misanthropy may be more evidence-based, it is less helpful with your wampum issue that we need to clear up. Don't worry about the humanity bit. Fewer endeavors require less actual contact with actual humanity. Like with art: get yourself a helper. You will need a guide, ideally young and good looking, who can offer chipper little suggestions. These usually involve paying people to do all of the things that got them into whatever mess led to their needing philanthropy. History suggests that this will go on forever. I hesitate to say it, but "problem solved".

    What kind of philanthropy? The key is to specialize in philanthropy for the very rich. Poor people problems often have cheap solutions (mosquito nets to avoid malaria for $10, etc.). Stay away. Rich people problems - opera costumes and so forth - are where the real pesos are burnt. At best, combine art and philanthropy. Give money so that rich people can see art exhibits a day early and don't have to pay for drinks. If you give away enough so that you 1.) can look at art/ballet/opera/etc. without having to look at any non-rich people out of your peripheral vision and 2.) never ever have to pay for a drink, then you should be pretty cured of excess shekels.

    Reexamine the premise

    Wait, wait, maybe this isn't even a problem that needs to be solved

    Alternatively, this could simply just be a case like that of excessive beauty, a overabundance of youth, extra helpings of restraint, or an oversupply of common sense - these are real problems to be sure, but these are problems of a rather select minority. Perhaps one simply accepts oneself as one is - complete with specie-stuffed pockets and bandwidth sucking zeros pock-marking one's many overseas accounts. There may be other problems in the future and the solution to these problems may well lie in the dough that you hold today. Do nothing. Sit on your (personal trainer trained) ass (on a private beach) while you wait (for your cocktail rushed out by the attentive help and) for the world to come to you.

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Comments (19)
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  • arbtrader
    , contributor
    Comments (585) | Send Message
    Chris, brilliant!


    My own modest suggestion for a 'starter' if you only want to shift in the direction of upper, upper class to simply rich:


    A quick $90k on the black Amex includes the infamous 'hyundai wing' and all the Dads on the block will seethe with envy.
    20 Jul 2013, 04:05 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11805) | Send Message
    Author’s reply » Someone in our town has an unfortunate green one and he is lousy at shifting it. For some reason, essentially 100% of the time that it drives past my wife, he stalls it out and has to restart it which she thinks is really funny. Also, it gets stuck on speed bumps. This is not the look that he was going for. He has probably damaged the transmission so badly that he could have saved money by buying a less expensive car simply to learn how to shift before buying a Lamborghini. A former colleague of mine had one too, but I am sworn to secrecy about what happened to it.
    22 Jul 2013, 08:41 AM Reply Like
  • retfldoc
    , contributor
    Comments (166) | Send Message
    Having owned a much more modest sports car albeit a Porsche and a boat (less than half the size of your suggested one) I would get the boat. You are forever learning how to sail it and you are forever shopping for things nautical. Plus you become obsessed with the weather. What else could you wish for?
    20 Jul 2013, 05:50 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11805) | Send Message
    Author’s reply » I agree with you 100%.
    20 Jul 2013, 05:53 PM Reply Like
  • Squeeky Wheel
    , contributor
    Comments (350) | Send Message
    I have a small boat and no car at all. One of the best choices of my life.
    20 Jul 2013, 09:25 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11805) | Send Message
    Author’s reply » More people should do that. I have always walked -- since kindergarten all the way through school and to each job I've ever had --. I've never really had any sensitivity to weather and I hate traffic. The key was to figure out what I want to do first and then live nearby. One can save a bit of money, get a bit of exercise, but also notice more and have more fortuitous instances of seeing interesting things and bumping into interesting people.
    21 Jul 2013, 08:47 AM Reply Like
  • byslkwd
    , contributor
    Comments (114) | Send Message
    Are you a car buff? what do you think of the Tesla becoming the vehicle of choice for finer people (?) vs the established luxury brands?
    20 Jul 2013, 10:35 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11805) | Send Message
    Author’s reply » Good question. I have very mixed feelings.


    Negatives: the subsidies, the banal, almost soulless exterior styling, the glitches commonly suffered by first adopters.


    Positives: Elon Musk is our Howard Hughes and it is a wonderful thing to have someone trying something new, the interior display, the space for kids, the convenience if you're in a corridor that has charging stations, and the 85 kWh Model S is wickedly fast, especially at mid-speed acceleration.


    The mixed: the quiet. I don't know if you put this one in the positive or negative column. It is quiet, but it is not what you're used to. I am unsettled and unsure regarding what to think about the quiet. Maybe one could get an MP3 recording of an Aston Martin to play while one is driving.
    21 Jul 2013, 08:54 AM Reply Like
  • SafisKusai
    , contributor
    Comments (258) | Send Message
    if you want to talk about quiet, the latest top gear uk episode featured a new all electric mercedes amg... stupid fast and the only thing audible was the air being pushed to the side.


    will say i really dig that ducati though
    22 Jul 2013, 06:13 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11805) | Send Message
    Author’s reply » Wow. Cool. I do love AMG.
    22 Jul 2013, 08:23 AM Reply Like
  • byslkwd
    , contributor
    Comments (114) | Send Message
    I think an important question is, how much of the Tesla's appeal is in actual propriety technology. They may have been the first to do it, but if it is really as successful as they hope, can another company duplicate it. If yes, they will have an established brand name that luxury car buyers so desperately need, with all the muscle and class, and just as green.My wife has never heard of a Tesla, but she has heard of BMW, Porsche, Jaguar, Mercedes, and Lexus. That is half the picture. If these guys gang up on Tesla, (and undoubtably will implement all of his ideas they can steal, with some improvements of their own), does Elon have a prayer?
    21 Jul 2013, 09:52 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11805) | Send Message
    Author’s reply » That is a great question and I don't know the answer, but the history of the economic incumbents in the automobile industry has been one of effective viciousness towards entrants as soon as those entrants start to make any real impact. Frequently, someone will look like they are getting some traction and the second they rise to the level of being worth some modicum of attention from the establishment and “wham!”, they are swatted down like a bug.
    21 Jul 2013, 10:59 AM Reply Like
  • arbtrader
    , contributor
    Comments (585) | Send Message
    "second they rise to the level of being worth some modicum of attention from the establishment and “wham!”, they are swatted down like a bug."
    Already happening in various states where franchise laws to 'protect' the consumer are used to force Tesla to use 'dealerships' to sell with all the associated overhead of taxes, real estate, employees fully staffed maint. bays, etc. Their business model was designed to leapfrog the need for dealers to speed up distribution.
    One further reason change happens slowly in old industries. Can you image if an App had to have a legal presence in every state to be sold in the Istore?


    Broadly speaking establishments don't take kindly to barbarians at the gate. My econ professor claimed that the Postal Service tried to get the monopoly authority over faxing in the early 80's. No idea if true but a great -and believable- story.
    21 Jul 2013, 02:32 PM Reply Like
  • rootbeer
    , contributor
    Comments (323) | Send Message
    You never mentioned the trophy wife.

    22 Jul 2013, 09:13 PM Reply Like
  • Brice Mckalip
    , contributor
    Comments (201) | Send Message
    Wives of any kind are cheap, divorce is the spendy part. And why bother with all that paperwork when you could be out sailing instead?
    24 Jul 2013, 01:08 PM Reply Like
  • Qniform
    , contributor
    Comments (4593) | Send Message
    The best idea - giving it away. Never a disappointment.


    The worst idea - the Ducati. They look (and sound) good, but a piston fragment imbedded in your body is a real possibility.


    Thanks for this entertainment. Merry Christmas and happy new year to all.
    12 Dec 2013, 11:41 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11805) | Send Message
    Author’s reply » Thanks and the same to you.


    If you're interested, my best short idea for next year will be posted on Seeking Alpha at 9:30 AM.
    13 Dec 2013, 06:22 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11805) | Send Message
    Author’s reply » My best short idea for next year:
    23 Dec 2013, 07:34 AM Reply Like
  • al roman
    , contributor
    Comments (19149) | Send Message
    How much for the Doggy in the window ?
    23 Dec 2013, 07:19 AM Reply Like
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