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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… Mike Winston 2 comments
    Nov 4, 2013 10:39 AM | about stocks: NWL, TUP

    Mike Winston,

    Would you please offer up an investment research technique that readers might be able to use?

    Assemble the Chairman's letters from each of the last ten years, and then read those letters in chronological order. Big deals and big changes in leadership will become immediately apparent. Is the company trapped in a bad competitive situation that leaves it continually facing 'challenges' that require charges? Or, does the company perform so well that the author has the opportunity to wax philosophical? Try the following experiment: look at Rubbermaid (NYSE:NWL) vs Tupperware (NYSE:TUP). Both companies sell molded plastic - do you see a difference in the letters?

    What are you up to professionally these days?

    I'm running a fund dedicated to event driven and intrinsic value investing. I take an approach that I would characterize as Modern Value Investing. It is "value investing" because whole company valuation and a stodgy and down-side focus govern my approach to markets and "modern" because concepts of frame dependence, time value, black swan, convexity, value-added research and hedging are combined to speed up and enhance the decision making process. Mr. Market is still the same mercurial actor, but today, he moves more quickly than in years past. All these investing buzz words come with the following caveat: you don't have to be a genius to make it work, it's about your disposition.

    What do you read about on SA that you wish could never hear from again?

    I would not ban anything - it takes energy better spent elsewhere. That is not to say that things don't bother me; I do understand and appreciate the question.

    If you could hear more from one other investor on SA, who would it be?

    You are the one I would like to hear more from.

    Thanks, Mike. I'm grateful for your taking the time to answer my questions. And I am several million times over as grateful for the money that I've made off of your ideas this year.

    Stocks: NWL, TUP
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  • Terrier Investing
    , contributor
    Comments (495) | Send Message
     
    Love the Chairman letter idea - thanks for sharing, Mike. A similar strategy I use is to read CC transcripts, even ones that are no longer "relevant". Why? It's always interesting to see how tone shifts over time, especially if you need to catch up on a story... in some cases, management can sound really confident that "this is the quarter" and you might believe them, until you look back and see that the past 12 quarters have been "the one" where they'd finally got it all figured out.
    4 Nov 2013, 11:00 AM Reply Like
  • Steven Reiman
    , contributor
    Comments (333) | Send Message
     
    I employ the annual letter technique as well, it is amazing what you can pick up.

     

    It can also be entertaining: I find that the letters are generally sunny and full of optimism in the 2004-2007 time frame and then quickly turn grim as they enter 2009-2009. I have found that the annual letter formatting even gets more dour as if the company is cutting expenses to the bone and cannot afford to put out glossy finishes and large amounts of color on their annual reports anymore.
    4 Nov 2013, 04:49 PM Reply Like
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