Chris DeMuth Jr.'s  Instablog

Chris DeMuth Jr.
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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 A Few ?s For… Terrier Investing 8 comments
    Nov 1, 2013 4:21 PM | about stocks: LNKD

    Terrier Investing,

    Do you know why you're here? We're taking the usual suspects of our favorite Seeking Alpha contributers and putting them through the ringer. You were hauled in today because you seem to have some good ideas about investing and we need to ask you a few questions. So, let's get you talking. Could you give us a tip - just one - for a research technique that you use to make money?

    I don't do this nearly as much as I should, but LinkedIn (NYSE:LNKD) and job postings are actually a pretty valuable source of information on a company's strategy on a go-forward basis. Ashraf Eassa in particular is a master at this; he has unearthed some pretty useful info. For example, he identified a business deal between two major tech companies prior to it being publicly announced because a few employees at the companies had mentioned it as a work project on their LinkedIn profiles (hopefully said employees did not get in any trouble!) He's also been able to gain insight into directions that certain firms are moving in by looking at what sort of talent they're looking to hire. Without stealing his thunder, and to use a totally random hypothetical inspired by the PwC acquisition of Booz... if a certain accounting firm was, to example, start putting out a lot of job postings for individuals with experience in strategy consulting, it might be a safe bet that said company is looking to expand their consulting operations. That might then predict higher margins and revenue cross-sell opportunities in future quarters. This intention may or may not have been highlighted by the company in its filings and discussions with investors (for competitive reasons, many companies like to keep things under wraps until they're a done deal). Conversely, if a company supposedly has a very rapidly-growing division on the cutting edge of something or other, yet they don't seem to be acquiring any talent to grow in that area, or nobody actually seems to work for them in that area, it might be a red flag. Both of these are purely theoretical examples in nature, but it demonstrates how investors can use nontraditional sources of public information to gain insight into what's up at companies they're looking into.

    What is with the screen name?

    For a variety of personal and professional reasons, I needed to use a pseudonym for my interaction with Seeking Alpha. I love puppies - terriers especially, though I'm pretty nondiscriminatory in my adoration of canine companions - so Terrier Investing seemed suitable. I actually used to have a picture of a very adorable terrier puppy as my profile picture, but the SA contributor team decided it was inappropriate and demanded I change it to something markets-related. A $10 bill being the nearest market-related object I could find, my new picture is of Alexander Hamilton, which doesn't really make much sense given my username, but that's that.

    If you could name something on SA that we'd make disappear so you'd never hear about it again, what would it be?

    The idea of "dead money" and related concepts. It may not be an answer to your question, but it really annoys me. Markets do things every day that confuse me, and while looking at "catalysts" can certainly be a helpful component of an investing strategy, the idea that historical stock performance is predictive of future results - or the idea that something that's cheap and profitable shouldn't be invested in because there's no wow factor or major paradigm shift in a month or two - it's just insane. Does that make sense? The investments that are the least sexy are often the most interesting purely for the reason that everybody looks at them and automatically discards them because they're "dead money" or "no catalyst" or whatever.

    If you could hear more from one other investor on SA, who would it be? (I'm asking the questions here, so it can't be me).

    Awwww, you're putting me in a tough spot here. First, I can't pick you??? Second, there are so many investors on this site I respect greatly. However, since you're asking who I want to "hear more" from, I'll pick someone who doesn't contribute very frequently but always has very interesting things to say when I talk to him. His name is Thomas Finser. I had the opportunity to meet him in person a while back and really enjoyed exchanging ideas and strategies. He gave me a long list of books to read which I'm working my way through; all have been very interesting and helpful. He's also (cough Thomas if you're reading this cough) a nice enough guy not to reveal who I am to the world.

    Thanks. You're free to go. But just remember, keep it clean because your secret identity is now in the hands of Mr. Finser and we may be talking to him in the future.

    Stocks: LNKD
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Comments (8)
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  • kadison
    , contributor
    Comments (294) | Send Message
     
    Chris, thanks for this!
    1 Nov 2013, 05:56 PM Reply Like
  • drew111
    , contributor
    Comments (514) | Send Message
     
    Just a comment, but that research question and subsequent answer is pure Fisher "scuttlebutt" , 21st century version. Don't do a lot of social network stuff, never would have thought of it! Great q and a.
    1 Nov 2013, 06:09 PM Reply Like
  • tuliptown
    , contributor
    Comments (1561) | Send Message
     
    Chris, this begged a follow up question that I am surprised you did not ask! As a book lover, I would love to hear a list of books that are worth reading (on any topic not just investing).

     

    I'll even toss out 2 just so you don't have to ask:

     

    "In the heart of the sea". great writing and true story

     

    for investing, "The Single Best Investment" by Miller
    1 Nov 2013, 07:31 PM Reply Like
  • Terrier Investing
    , contributor
    Comments (443) | Send Message
     
    In no particular order of importance, some books that I've enjoyed, spanning across topics and genres... most of these were first recommended to me by close friends and associates, so I can hardly claim it as an original reading list:

     

    Valuation (McKinsey)
    Greenblatt's stuff
    Buffett's shareholder letters
    The Goal (Goldratt)
    The Art of Value Investing (Tilson)
    Modern Security Analysis (Whitman)
    anything by Damodaran
    Ordinary Men (Browning)
    Tipping Point (Gladwell)
    Giants of Enterprise (Tedlow)
    Atlas Shrugged (and really anything by Rand. Read them all at least three times.)
    Unintended Consequences (Conard)
    Eat People (Kessler)
    The Yearling (Kipling)
    A Connecticut Yankee in King Arthur's Court (and really anything else by Twain)
    Watership Down (Adams)
    Tortilla Flat (and The Red Pony, both by Steinbeck)
    The Perks Of Being A Wallflower (Chbosky)

     

    To quote the last one... be a sieve, not a sponge. Each of these books has, I think, something interesting to offer; that doesn't mean that each is wholly correct in its implied view of the world.
    1 Nov 2013, 08:26 PM Reply Like
  • Terrier Investing
    , contributor
    Comments (443) | Send Message
     
    Just realized I got the quote wrong - it's "filter not sponge" rather than sieve. But same general concept.
    3 Nov 2013, 09:57 PM Reply Like
  • Terrier Investing
    , contributor
    Comments (443) | Send Message
     
    And amusingly enough, I mean it in the exact opposite way from Perks - in context, the teacher was advising his student to be "skeptical" of Fountainhead. I would advise people to be very trusting of Fountainhead and skeptical of literature that disagrees with it.
    3 Nov 2013, 10:23 PM Reply Like
  • Dr. Kris
    , contributor
    Comments (366) | Send Message
     
    "Could you give us a tip - just one - for a research technique that you use to make money?"

     

    I use support & resistance levels.

     

    I'm counting that as two.

     

    Dr. Kris
    2 Nov 2013, 01:53 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (9591) | Send Message
     
    Author’s reply » Thanks! I like getting one extra for free.
    2 Nov 2013, 03:54 AM Reply Like
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