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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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  • Troll Hunting 30 comments
    Sep 16, 2013 6:44 PM

    There is a certain conflict inherent in writing about investment ideas. Ideas have any value to the reader only if they are written from a variant perspective that is meaningfully differentiated from the market in terms of information and judgment. At the same time, it is not ideal to wade through ad hominem attacks from internet trolls. Any good investment ideas will have strong - often strongly emotional - opposition from people who hold opposing views.

    At first, the appearance of internet trolls struck me as a curiosity. What a bizarre way for someone to spend their time. I have no particular love for medieval dulcimer music or haiku poetry, but it would never occur to me to lurk around dulcimer recitals or haiku festivals just so that I could snarl insults at dulcimer players or haiku poets... And this is not due to any particular virtue or concern for their feelings. Instead, I'm just too busy with things that I do like to do. The world is cluttered with interests that I don't happen to share and it makes no difference to me. In fact, it is probably in excess of 99% of ideas that I don't accept or tastes that I don't have. So why do some internet readers bother to paw through event driven, value based writing on investment ideas and everyday arbitrage just to say, in effect, how much they hate event driven, value based writing on investment ideas and everyday arbitrage? Strange.

    As it has morphed from an oddity to an inconvenience, I offer a general strategy and a specific disclaimer that I will simply refer to in the future. Here is goes.

    General Strategy

    In nine months, across over a quarter of a million page views and a substantial number of commenters, I have received no/zero/0 overlap between 1.) internet trolls and 2.) people with their own actionable ideas. Instead of matching insult for insult, which I think that they rather like, I simply reply with the question, "what is your favorite idea?" Favorite, falsifiable, occasionally humiliating ideas make people vulnerable. Apparently, people either like ad hominem vitriol or they like generating ideas, but they don't engage in both and they don't like to admit that they don't. So, just ask. I have yet to receive a single answer from an internet troll. It ends the conversation every time. I have taken into account that in revealing my general strategy, I am taunting internet trolls to hit me with scathing insults followed by well-researched value investments. Bring them on (and as long as you bring both and if the investment ideas are really good, please present them via direct private message)


    All I want out of (my work) life is to underpay for the value that I receive. I am agnostic about all (legal) things other than price. I will show up with the fifty cents of money to pay for anything that is worth a dollar. Now, in many cases the reason why a dollar of value is available for purchase for the price of fifty cents is a certain Pavlovian dread associated with horrific past performance. So, while I am utterly indifferent to the path that a given security took to get to its price, it often happens to be that there are those among my favorite ideas that have declined precipitously. I don't care. I am not responsible. It changes nothing. So, if a given comment amounts to, "you like 'x'? But 'x' declined by 'y' before you bought it or recommended it", then the commenter will receive in reply a link to this disclaimer. If you are a value investor and buy or recommend a security that has similarly declined in order to reach the price at which you find it attractive and you too get comments with this construct, please feel free to use this disclaimer, too. Many comments have the same point and they don't really need multiple answers. One could get fancy in explaining marginal cost and benefit and the importance of ignoring sunk costs, but why bother.

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Comments (30)
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  • Derek Munyan
    , contributor
    Comments (19) | Send Message
    Chris - I was cracking up earlier when the one troll was heckling you and you just responeded with 'whats your fav long and short' people need to get a life.
    16 Sep 2013, 07:06 PM Reply Like
  • Tom Shaughnessy
    , contributor
    Comments (1144) | Send Message
    Thank you Chris!
    2 Jan 2014, 02:55 PM Reply Like
  • johncworth
    , contributor
    Comments (439) | Send Message
    Nicely thought out, and as usual entertainingly presented. Let's face it, the majority of trolls likely live in their parents basement, thus have few options for entertainment other than flailing on others who have achieved more. When you read their attempt at scathing comments it is useful to visualize them hunched over their keyboards, pecking away. They are to be pitied as much as castigated. (That being said, when you are the subject of their attacks it is still vexing.)
    16 Sep 2013, 07:18 PM Reply Like
  • tuliptown
    , contributor
    Comments (1566) | Send Message
    I do like lively comment sections. But, I also dislike the barb ladden attacks on authors who take the time and effort to write pieces. It only detracts from the author if they return personal jabs at the trolls so I support your practice. Bully of an idea. ... Now, can SA make this know to all authors.
    16 Sep 2013, 08:30 PM Reply Like
  • KJP712
    , contributor
    Comments (472) | Send Message
    The more popular you become the more eyes will be watching you.Consider it a product of your success.On my Instablog I am waiting for anyone to comment trolls included.I would be honored for any attention at this point.Just started in February so it is still a work in progress.When I post that axion power guy comes in to knock me down the list so it may only be a timing issue...
    16 Sep 2013, 08:31 PM Reply Like
  • Partimer too
    , contributor
    Comments (34) | Send Message
    "Instead, I'm just too busy with things that I do like to do."


    So are the trolls......just busy doing things they like to do. And they are everywhere.


    I don't say thank you to SA authors as it clutters up the comments and really adds nothing to the discussion, but on your blog I will gladly make an exception. I have made nice profits from some ideas you have presented and hold a couple of your ideas now. More importantly for me, I have become a much better investor and have gained a much better understanding of the process and possibilities (I spent a good part of the past weekend reading everything I could find on mutual conversions). I have a hand full of SA authors I follow are at the top of the list. As long as you keep posting, I'm going to following.


    Thank you for your efforts.


    Meanwhile, the trolls are still trolling.....but going nowhere.
    16 Sep 2013, 09:22 PM Reply Like
  • DAG Investments
    , contributor
    Comments (4129) | Send Message
    Well said, Chris. While trolls are immensely annoying and are the main reason I've not attempted to become an SA Contributor myself, I must admit that they do actually have some value ... since every trade requires a "greater fool". I've noticed a pattern that the trolls most often surface to espouse a rearview-mirror investment thesis about a stock they either lost big on in the past or one that they missed the boat on and are trying to wish down in order to pacify their regrets. Therefore, they can be a great counter indicator.
    17 Sep 2013, 04:40 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11718) | Send Message
    Author’s reply » Thanks. Good point.
    17 Sep 2013, 08:30 AM Reply Like
  • Miguel Marecos
    , contributor
    Comments (86) | Send Message
    Trolls are annoying that's for sure, but they can clearly indicate the sentiment on your idea, which is good!
    I have read a lot of (value) books on investments talking past manias and crashes i.e. nifty fifty, dot com, etc... And I was always amazed how people can think "This time is different", and "Warren Buffet has lost it" and separate their analysis from sound judgment to place it on hope and thin air!
    But now I can see them in action, one example being TSLA, and it's a good emotional experience... you learn to control your emotions and you learn to be alone in the market without being affected and more importantly you will review the facts of your thesis not the dreams, and sometimes your conviction grow even stronger. It's enlightening!
    17 Sep 2013, 05:53 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11718) | Send Message
    Author’s reply » Yes, amazing. I always squirm or smirk when I even hear the words "this time is different" or "new era", yet they continue to pop up from time to time. I would at least re-brand them.
    17 Sep 2013, 08:31 AM Reply Like
  • Miguel Marecos
    , contributor
    Comments (86) | Send Message
    Ah yes, the four most dangerous words in investing!!
    One blog that you mentioned and I started to follow, Wexboy, has great analysis on USOP, but the real gem/lesson is the commentaries (lots of trolls). In this one the euphoria is already over. I have a feeling that TSLA is going to be the same... but of course I can be wrong.
    17 Sep 2013, 08:42 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11718) | Send Message
    Author’s reply » I'm glad that you started following Wexboy; his blog is a real treasure trove. So far this year, UNXL over $30 had the most enthusiastic supporters.
    17 Sep 2013, 08:48 AM Reply Like
  • Miguel Marecos
    , contributor
    Comments (86) | Send Message
    Another one... thanks for the stock ticker!! Another gem!! I just read one article and then saw the stock price chart... it's impressive how trolls commentaries disappear with a crashing stock price! I have a theory that the number of commentaries is intrinsically related to their gains on the stock... why do not take your 200% (lucky) gains and go somewhere else? Why they always say it's going to the moon?
    17 Sep 2013, 09:10 AM Reply Like
  • Perkins Cove
    , contributor
    Comments (640) | Send Message
    Thank you Chris. Will save this article for what to do when trolled, rather than waste my time trying to reason with them.


    I hope I have never been a troll.....grin
    17 Sep 2013, 07:05 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11718) | Send Message
    Author’s reply » You do nothing but add to the experience and knowledge on Seeking Alpha... and I do enjoy the back-and-forth over ideas.
    17 Sep 2013, 08:34 AM Reply Like
    , contributor
    Comments (166) | Send Message
    Followed David Jackson's link to this article. Really enjoyed it and will probably refer to it in the future. Thanks for sharing!


    Would also like to add my own pet peeve -- when I comment on an article I always check the notification box in case someone comments on my comment.


    I find it annoying when I see a new comment, go to the article, and the comment is about some sports team -- which generates even more comments about the sports team.


    Because I have no time to waste with such distractions, I have to reluctantly turn off the comment notification in order to avoid further distractions.


    Wish SA would put a sports team filter on such comments.
    17 Sep 2013, 07:22 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11718) | Send Message
    Author’s reply » You're welcome. Further complicating things, we do a lot internationally, so I'm routinely on the phone with traders in Asia and Europe, many of whom are huge sports fans... but often cricket and rugby in addition to football and baseball. So, the sports analogies and references run think and often in confusing or even opposite directions. "Punt" is one I've had particular problems with as American English uses it to mean "defer" a given speculation and British English uses it to mean to take a gamble. So "punt" much as the verb "table" can be opposite on either side of the Atlantic.
    17 Sep 2013, 09:03 AM Reply Like
  • Miguel Marecos
    , contributor
    Comments (86) | Send Message
    I agree with you, but that is why people who invest should always make their own research and reach their own conclusions!
    17 Sep 2013, 11:31 AM Reply Like
  • DAG Investments
    , contributor
    Comments (4129) | Send Message
    Valid point, but a few things to consider along those lines, if I may ...


    If that's the first thought that comes to mind on the subject of trolls, you're probably wasting valuable time reading too many of the wrong SA Contributors ... in my humble opinion, the most value in SA is from finding the best/proven Contributors and completely filtering out the other >60% that are random one-article pump & dumpers or unscrupulous shorts trying to manipulate a particular stock.


    EVERYONE in the investment world "talks their book" (as they should since it makes no sense to back an investment that one doesn't believe in) ... those who say they don't "talk their book" are disingenuous. If a Contributor is talking their book and has consistently been "wrong forever", simply refer back to the first point above and don't waste any more time reading what they write since there are plenty of SA Contributors who have been right forever.


    While Chris can certainly speak for himself, I have a feeling that, in speaking about "trolls", he was not referring to commentors who simply disagree with a Contributor's investment thesis and intelligently articulate why they disagree without resorting to childish attacks.
    17 Sep 2013, 11:49 AM Reply Like
  • DAG Investments
    , contributor
    Comments (4129) | Send Message
    I just need to point out that the comment I was replying to above has been removed so it now looks like my reply was to the article itself or to a different comment, but it was actually to a comment that seemed to be arguing that "trolls" are anyone who disagrees with a contributor and are necessary to call out contributors whose "agenda" is to promote losing investment ideas.
    20 Sep 2013, 12:25 AM Reply Like
  • Tim Bernard
    , contributor
    Comments (26) | Send Message
    I love your suggestion - exposing a troll politely is a wonderful thing. If you catch any really good ones, let me know so that we can keep an eye on their comments elsewhere on the site.


    But I worry that a commenter who only critiques (as long as they refrain from ad hominems, etc.) may still be doing readers a service. Although we might not enjoy being at a cocktail party with a person who just pokes holes and doesn't create anything, society may well be better off for the presence of such Devil's Advocates. Should SA be a cocktail party or a society? Or is that dichotomy unfair?
    17 Sep 2013, 12:44 PM Reply Like
  • Perkins Cove
    , contributor
    Comments (640) | Send Message
    IMO, SA should be an investment/trading site where everyone is treated with respect. Trolls tend to not do that.
    17 Sep 2013, 01:16 PM Reply Like
  • Jake Huneycutt
    , contributor
    Comments (1423) | Send Message
    Excellent blog, Chris. It's funny, I never thought of it this way before, but you are spot-on.
    20 Sep 2013, 11:05 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11718) | Send Message
    Author’s reply » Thanks. I enjoy and learn a lot from your articles and was interested to see Citron join you on the Z thesis.
    20 Sep 2013, 11:14 AM Reply Like
  • William Koldus, CFA, CAIA
    , contributor
    Comments (2015) | Send Message


    Came across this post today. Enjoyed the disclaimer and general commentary on the topic. Frankly, it made me laugh a few times. I would venture to say that a majority of value/contrarian investors with any experience need humor to put things in perspective at some point. Look forward to reading more of your work,


    William "Travis" Koldus.
    20 Sep 2013, 12:55 PM Reply Like
  • TimeOnTarget
    , contributor
    Comments (3679) | Send Message
    Chris --


    I just came across this link from the Valuable Insights interview/article you did a month or so back.


    Just thought I would share one of my favorite expressions:


    "The opposite of love is not hate; it is indifference."
    2 May 2014, 04:14 PM Reply Like
  • scoots
    , contributor
    Comments (1412) | Send Message
    I wonder if it doesn't dignify the trolls too much to even respond with your very appropriate query?


    Perhaps two other responses would suffice: One, complete indifference as suggested above, ie no response (Everybody recognizes the troll anyway); or Two, "Thank you for your warped and twisted views."
    21 Dec 2014, 12:39 AM Reply Like
  • connellybarnes
    , contributor
    Comments (557) | Send Message
    Trolls can educate:
    24 Jun 2015, 07:28 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (11718) | Send Message
    Author’s reply » That is wonderful, connellybarnes. Thanks for posting.


    I love science. One of my favorite parts of science is the iterative nature in which critics tear down hypotheses over time with little bits of evidence here and there until the cumulative understanding improves. A cautious attitude towards newness is fine, but unless it is confirmed by the data, then largely aesthetic concerns such as are prevalent in the anti-GMO cause should be tossed out.


    This type of inconsistency makes Mark Lynas look like a serious, thoughtful person who changes his mind with the evidence. In terms of food preferences, wealthy people in the first world should make whatever choices that they would like with their own money. But with millions of lives at stake, those elite food preferences should not dictate public policy.


    Disliking GMO should rate right up there with my distaste for raisins: a private matter that would be inane hubris to extrapolate beyond a highly localized significance. In terms of public policy, the language of the public square should be limited to science and reason.
    24 Jun 2015, 07:37 AM Reply Like
  • Just One Lab Nerd
    , contributor
    Comments (188) | Send Message
    It took me years (and technically it is still a work in progress) to come to the conclusion that Trolls are not worth much time or effort,....


    Still have 1 or 2 that historically have gotten under my skin on iHub,.... but even them I mostly know how to ignore or neutralize now.


    Now and then,.... I bait them a bit,.... but in retrospect it really isn't worth the time & effort,.... so will continue to work on that work in progress,..
    23 Feb, 02:14 PM Reply Like
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