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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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  • Just 10 Questions For Samir Patel On His Retirement From Seeking Alpha 18 comments
    Oct 9, 2013 6:29 PM

    Over the course of this past year, I have had the opportunity to work with Samir Patel on a number of writing projects for Seeking Alpha. He is a great editor, investor, and friend. I am grateful for the time that he has spent on my various articles. I am in admiration of his many talents. Mostly, I look forward to continuing our friendship and collaboration in his new role.

    BS Exit Interview Question #1: What are you going to miss most about SA and how frequently will you read or write for SA in the future?

    I plan to use SA quite frequently! RTAs, articles, market currents, SA Pro… they're all very useful products for investors. I'd love to continue contributing and commenting and certainly plan to do so to the extent that my future employer(s) will allow. And - it's going to sound cliché - but what I'm going to miss most about SA is the people. Our contributors are great. Of course, the SA Pro team has some truly special people and I'll always have very fond recollections of my first "boss" (Rachael, I love you, in a way that's not in violation of workplace harassment laws. You were an awesome mentor and manager.) Nonetheless, I plan to keep in touch with all my editor/contributor friends - as I've told all my coworkers, this is not the end of my SA journey.

    BS Exit Interview Question #2: What are you most looking forward to in your next step in your career? Blah blah blah…

    The principal of the hedge fund I'm joining is absolutely brilliant; he has a very unique style of investing and an extraordinarily impressive track record. I think he'll be a great professional as well as personal mentor and I look forward to learning a ton and refining my own investing style based on his experience and guidance. I'm at the point in my 'investing career' where I have some intrinsic talent, some theoretical knowledge, but only limited practical experience as an investor; this next step as a hedge fund analyst will allow me to exponentially improve that third item (as well as the first two).

    Debunking: What, in your opinion, is taken seriously by investors but is actually completely bunk and must be debunked by you here and now?

    First, a brief caveat here: my experience is obviously limited compared to many professional investors, so I don't believe that I have everything markets-related figured out. I'm fully aware that I don't know everything. That being said, I think most investors define risk the wrong way. I think volatility and betas are terrible (perhaps even useless) measures of risk. As another example, many think it's risky to put money into a stock that has an ugly chart - I can't tell you how many times I've pitched ideas to people, and they've responded with "but that stock is dead money". What's happened over the past five years may have a lot, a little, or no relevance to what's happening today and tomorrow, and investing is by nature forward-looking. Further, a lot of "unsexy" businesses may not grow at ten trillion percent per year, but they often trade at equally unsexy valuations and thus provide the opportunity for substantially above-market concerns. Etcetera. Risk is always and everywhere a function of price.

    Recriminations: Thank God that's over! Who or what did you have to deal with on a regular basis - a stock or person or topic - that drove you crazy but you couldn't do or say anything about until right now?

    Quite honestly, I truly enjoyed my time with SA and have no major complaints. Your question phrasing makes this sound like a bigger deal than it really is, but I guess from an editor's standpoint, it's a little frustrating when contributors (or commenters) are absolutely convinced that they know 100% of the story and there's absolutely nothing to learn from anyone else. Many times, people become too emotionally attached to their positions and don't see that when they're receiving feedback (whether from editors or readers), it's not a personal insult, but rather a helpful suggestion from a different perspective. SA is very adamant about having no in-house opinion; all feedback we provide is simply an attempt to help the contributor in question communicate their point more clearly to readers, so it can occasionally be frustrating when contributors email us (or post on the forums) accusing us of trying to suppress their viewpoint or hurt their feelings. That's not at all what we're trying to do - we're just trying to provide our readers with consistently high-quality, well thought out analysis on all stocks from all perspectives. Especially for our professional-level products, that requires us to apply editorial criteria to ensure a positive user experience. We don't like declining articles any more than you enjoy receiving such a note - but it's necessary for SA to continue to be the top source of financial analysis on the web. Having an outside, uninterested, objective third party point out "but you're assuming XYZ - why's that?" can often be helpful in refining your investment thesis or presentation thereof.

    Texas: What exactly happens if one messes with Texas?

    I could tell you, but… well, you know. Since I'm not allowed to answer that due to the Texan code, if you'll permit me a rearrangement, I can tell you what happens if one raises taxes: it's bad and disincentivizes business, and consequently job creation and societal progress.

    Advice? Please drop some knowledge on us in case we never hear from you again:

    Just one long:

    INTC (would've used GPT but I stole that one from you and can't claim it as an original idea.)

    Just one short:

    None that I can think of. I don't really short much; I occasionally buy a long-dated put or two on overvalued momo stocks as a (very tiny) hedge against broader market downturns, but my long exposure is typically 98-100% excluding cash.

    Just one book:

    Atlas Shrugged, obviously.

    Just one joke:

    Is it bad that I can't think of any that are South Park references and likely not appropriate for publication? Awkward. Okay, I'll steal one from Vince Martin. What did the fish say when it ran into a wall? "Dam."

    Alternatives: For the sake of brevity, I think that we can all assume that you will achieve fame and fortune but fast forward a few years and imagine, if you will, that the door flies off its hinges and it is the Feds and they are willing to settle for no time or penalties. Your good name will remain intact. The only condition is getting debarred from ever investing in a public company again. What would you do as an alternative career?

    What? I don't understand. Why would the Feds come after me??? :'( I'm a nice person! I love puppies and am kind to old ladies and lost children and confused tourists in Dallas, or at least I would be if any tourists ever came to Dallas. More seriously, besides investing, I'm really interested in business strategy and would thoroughly enjoy a career in corporate strategy or management consulting. I'm also an amateur novelist, and joke with people that someday I'll retire and sit around drinking mochas and writing stories. If I could figure out how to make money by hiking in remote areas and taking pictures of nice landscapes, I would do that too.

    Capitalism: How optimistic are you about the future of free market capitalism? Or is it hopeless?

    Call me a hopeless optimist, but I believe that the future is fine. Empirical data and history prove beyond a shadow of a doubt that free market capitalism (with limited and sensible regulation to reduce negative externalities) is the path to prosperity for all humanity. It's what allows the common man today to maintain a much, much higher standard of living than the common man in feudal or prehistoric times. Simply put, people respond to incentives, and a free market incentivizes them to create value - if you're making a profit, it means you're selling something that's worth more to your customers than they pay you for it; it means you're creating wealth and improving quality of life. There will often (always?) be misguided uprisings of populist sentiment, but ultimately, the injurious effects of bad policy will be recognized and result in a return to smarter policy. As my ever-wise former college roommate Travis put it, politics is a bit like a pendulum - when it swings too far one way, it'll eventually swing back the other way, and on average it'll be in the middle. Hopefully that middle is a free-market economy with limited regulation to prevent negative externalities.

    Rand: You've obviously read and you've thought a lot about Ayn Rand and objectivism. Are we capable of learning the lessons of central planning and state control of our economy in theory, through understanding human nature and our history? Or, do we need to personally live through every lesson again in order to learn?

    When the competition judging period is over, feel free to share my Atlas Shrugged essay… until then, I believe that, to some degree, you need some real-world experience to understand how the world operates. A little bit like you couldn't perform open-heart surgery just because you've read about it, you can't really understand how an economy functions until you've actually participated in it. I am ashamed to admit that for a very brief time in my early teenage years, I was sucked into a few bizarrely irrational populist lines of thought (ex. executive pay should be capped, capital gains tax rates should be set equal to income tax rates). Obviously, real experience in the workforce (and hands-on visibility into how people respond to various incentives) showed me the error of my previous thinking; this experience combined with reading and a more mature and pragmatic (as opposed to idealistic) view of the world formed the basis for my close-to-Randian view of markets, government policy, and wealth creation. Things like socialism sound great in theory when you're ten - the rich have so much money, why not just give it to the poor? - but when you get out into the real world and start understanding incentives and the broader issue of societal progress vs. static redistribution (Eat People and Unintended Consequences by Andy Kessler and Edward Conard respectively are great looks at these), you realize that things that sound great in theory often utterly fail in practice. So ultimately, I think you do need some experience to fully understand, and I also think it's natural to be a little idealistic when you're a kid and more realistic/pragmatic when you grow up… but at the same time, it would undoubtedly benefit our world if we could reduce the prevalence/acceptance of some very flawed lines of thought that are omnipresent in modern society.

    Millennials. Kids these days. Walking on my lawn, their music, and have you seen what they wear? Argh. You seem like a constant source of common sense. So what the hell is wrong with more or less everyone else your age?

    Yeah, what's this Dubstep stuff? I don't understanddddd. It's not music, it's noise! Bring back pop punk! So yeah, I rant about Millennials all the time. As much as I'd like to say that it's just a reoccurrence of the long-existing "kids these days" phenomenon, I think there is something truly different (in a bad way) about the current generation. For example, there was this PwC study a while back which concluded that Millennials aren't willing to work longer hours early in their lives even if it leads to career advancement and more success. Other studies (and general knowledge) reveal very disturbing trends like Millennials not realizing the value of things like hard work, money, career success, etc. Without being too reductionistic, I think this is possibly a result of "everyone-gets-a-trophy" parenting (thankfully my parents did not take this approach) and a broader social attitude that money is bad. This is obviously patently false - without repeating my entire Atlas Shrugged essay here, supply chain surplus is divided into profits and consumer surplus; consequently, making money generally means you've added value to the world. The more money made, the more value added. Although there are other ways to add value that don't have an immediate monetary payoff (ex. raising your kids well), the point is that people who make a lot of money generally do important things and help keep the world functioning and improving. It's currently socially frowned upon to say things like this.) There are many other issues as well (ex. I think twitter and texting have reduced the current generation's ability, broadly speaking, to carry on deep/important conversations that require an attention span longer than six seconds) but I'll save the rest of it for a book about achieving career success that I'm working on with my friend/mentor Austin. Stay tuned.

    India: What do you think about the future of India and Raghuram Rajan's new tenure as Reserve Bank of India governor? (Inside joke alert: Samir has only a distant hereditary connection to India, but still manages to get totally out of context questions about India/Indians, so I thought I'd close with that).

    Honestly, I'm unfamiliar with the Indian economy and politics beyond commonly-known facts and some random specifics related to Vodafone and their ongoing "conversations" with Indian authorities. I suppose I'll learn more about it if/when I invest in Indian companies and/or companies that do substantial business there. I could probably tell you a few things about the Texas economy, though… and I think the future for my Texas flag tie is that it will soon have many Texas-themed companions on my tie rack. Have I now fully established that I was born in raised in Dallas and consider "Texan" to be a valid ethnicity to put on my census response and job applications? Yeah? Okay, I'll quit now.

    Don't quit now! Thank you, Samir, for taking the time to submit to this grilling. In addition, I have benefitted from reading your novel, your essay on Ayn Rand, and your refreshing and brilliant thinking on multiculturalism and political correctness. Were you representative, I would feel much more confident in the future of capitalism and in the Millenials. Happily, you actually are representative of Texas. Proving that I value this friendship more than I value my ego, I am actually looking forward to our Scrabble game Friday and am unfazed by my opposition research team's report that apparently, among other things, you are a famous spelling bee champ.

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Comments (18)
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  • Whopper Investments
    , contributor
    Comments (183) | Send Message
    we will miss you Samir!
    9 Oct 2013, 08:45 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    Aww, I'll miss you too, Whopper!


    Chris, thanks for all the amusing (and insightful) questions. I can honestly say that you've been one of my greatest mentors/advisors and I'm very grateful for all the advice/thoughts/etc you've shared. Looking forward to our game of Scrabble, though I feel like your strategy will beat my vocabulary...
    10 Oct 2013, 08:32 AM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (563) | Send Message
    Great job all around. Best of luck Samir!
    9 Oct 2013, 09:02 PM Reply Like
  • sheldond
    , contributor
    Comments (1453) | Send Message


    I only know you from your writing and comments but what I know is impressive. Best of luck in your new adventure.




    9 Oct 2013, 10:25 PM Reply Like
  • Special Situations and Arbs
    , contributor
    Comments (1447) | Send Message
    LOVED this article. I do have just 5 thoughts after reading it:
    1)Chris-Where do you find the time? Did you record this?
    2)Samir-For the second time in 2013 I have had the following feeling:How could a teenager know more about so many things in life than I do at well over double their age? I do know quite a bit about options so if you ever want/need help there I'd be happy to oblige. (The other teen is my 16-year-old nephew. He has been building robots since he was 11 and has worked for IBM the past two summers.)
    3)All 50 States-Perhaps if we raise the drinking age to 50 we would have a country of intelligent, thoughtful, interesting people like Samir. (Samir is not yet of drinking age).
    4)TA Gods-Interesting point Samir about technical analysis. I look at TA like GOD, those who believe BELIEVE and those who don't think it's the silliest thing in the world. I wonder if the non TA believers could benefit from the massive number of TA diehards by doing the exact opposite of traditional TA. It is the ultimate form of contrarianism.
    5)Glass half full/empty-I guess what is going on the world/country/city/nei... space is all subjective anyhow. But optimism never killed anyone.


    Good luck in your new venture.
    9 Oct 2013, 10:54 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    1) Chris actually emailed this to me and I sent him the answers back... more efficient than audio recording/note taking, and probably more accurate too.
    2) Thanks for the kind words! Keep in touch.
    10 Oct 2013, 08:38 AM Reply Like
  • David Jackson
    , contributor
    Comments (1279) | Send Message
    Chris, this is a wonderful interview - thank you. Samir is a remarkable person, and we'll miss him at SA.
    9 Oct 2013, 11:06 PM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    Thanks, David - SA is a remarkable company and I'm excited to see where you go from here. Even though I'm no longer employed by SA, I'll always consider myself part of the team. Please don't ever hesitate to reach out to me with questions/ideas about various SA projects - I'd love to stay involved. Excited to see how the platform grows and continues to change the way investors find and access top-quality investment analysis.
    10 Oct 2013, 08:33 AM Reply Like
  • Bram de Haas
    , contributor
    Comments (664) | Send Message
    Cool read. Congratulations and good luck to Samir.
    9 Oct 2013, 11:32 PM Reply Like
  • KJP712
    , contributor
    Comments (471) | Send Message
    So young to be retiring....Good luck in your new endeavor !
    10 Oct 2013, 12:28 AM Reply Like
  • SA Editor Jeanne Yael Klempner
    , contributor
    Comments (176) | Send Message
    Samir, you're going to be greatly missed around here. Big hug (in a way that's not in violation of workplace harassment laws...).
    10 Oct 2013, 02:13 AM Reply Like
  • SA Editor Samir Patel
    , contributor
    Comments (163) | Send Message
    You too, Jeanne! You're still the top candidate for being my official editor when I become a famous novelist ;)
    10 Oct 2013, 08:34 AM Reply Like
  • Paolo Gorgo
    , contributor
    Comments (385) | Send Message
    Best of luck, or as we say in Italian "in bocca al lupo".
    10 Oct 2013, 03:48 AM Reply Like
  • bazooooka
    , contributor
    Comments (3689) | Send Message
    I guess we didn't lose Samir to consulting (or biochem) after all. =)


    A great addition into asset management. I hope you continue to post on SA now and again.
    10 Oct 2013, 06:12 AM Reply Like
  • Envoy Global Research
    , contributor
    Comments (588) | Send Message
    Nice interview and thanks for sharing it.


    I would just like to clarify that socialism is not about taking money from the rich and giving it to the poor. It is about designing a society that doesn't place money and profit at the center of every single decision, especially when it comes to decisions that effect everyone in society. There are certain human values that are higher than money and profit and it is certainly not pragmatic to design a society solely around what is best for the bottom line of individuals chasing profits. Sometimes what's profitable for an individual is not necessarily good for everyone else in the society and to maintain a civil society that we can all enjoy (and ultimately profit from) and that does not trounce on our highest values, it sometimes helps to restrict profits on an individual level.


    I would also add that the profit incentive as a motivating factor, or creator of value, is greatly exaggerated. The truly incredible human achievements in any facet of life, including business, are never motivated by profits or wealth. Surely Einstein didn't dream up the theory of relativity because he dreamed of a pot of gold. Nor did Zuckerberg succeed at building Facebook because he dreamed of making billions of dollars. I am also pretty certain that the founder of SA didn't start this website with a firm understanding of how he could profit from it. I am quite certain he had broader ambitions than just profit in mind (though I can let him chime in here if he so chooses).


    Quite the contrary, money and the sole pursuit of it, tends to stifle creativity and innovation. There are many other motivating factors for human achievement aside from pursuit of individual profit in a free market and making money certainly doesn't mean that you have added any value.


    In the field of investment, interestingly, at least from my experience, the greatest investment profits come when you ignore the numbers and the profit equation, and focus on the bigger issues that confront the business.
    10 Oct 2013, 06:46 AM Reply Like
  • Maulik Patel
    , contributor
    Comments (54) | Send Message
    Good luck with your growing career. I'm happy to see that Chris is a friend of yours. Keep good company wherever life takes you.
    10 Oct 2013, 08:00 AM Reply Like
  • arbtrader
    , contributor
    Comments (553) | Send Message
    Best for the future and I hope you check back in frequently. Unfortunately, as a recent SA user I only got to enjoy your stuff a few weeks.....
    But c'mon- we both know the best joke ever is: "Do you like Fish Sticks?"
    The only person who does not get that joke is Mr Kanye West and others who take themselves way too seriously.....
    Best, AT
    10 Oct 2013, 09:53 AM Reply Like
  • Special Situations and Arbs
    , contributor
    Comments (1447) | Send Message
    With Samir moved on to the hedge fund world, as a SA writer I am now working with SA editor Daniel Shvartsman. Like Samir, Daniel is intelligent, patient, and prompt. He knows the platform that he is working on cold and is a pleasure to deal with.
    I am impressed that SA somehow has a knack for hiring the right people and training them properly. I don't see that all the time.
    24 Oct 2013, 05:33 PM Reply Like
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