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Chris DeMuth Jr.
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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
My blog:
Rangeley Capital on Harvest
My book:
Rangeley Capital Best Investment Ideas
  • Rangeley Capital Best Ideas In Charts 16 comments
    Nov 22, 2013 8:28 AM | about stocks: PFN, TBT, LORL, OSHC, LPS, TMF, GPT

    2009 through 2013 YTD

    We are coming up on our fifth year of publishing our best ideas. In preparation for announcing our next two, this is the exhaustive list of our best ideas; all were initially published as prospective ideas.

    2009 Long PFN, Long TBT

    This does not include PFN distributions

    (click to enlarge)

    2010 Long LORL, Long OSHC

    This does not include LORL special distributions

    (click to enlarge)

    2011 Long LAB, Short LPS

    LAB was acquired at a premium and de-listed

    (click to enlarge)

    2012 Long OSHC, Short TMF

    TMF short continued through 2013

    (click to enlarge)

    2012-2013 YTD Short TMF

    (click to enlarge)

    2013 Long GPT, Short TMF

    (click to enlarge)

    Themes: Best Ideas Stocks: PFN, TBT, LORL, OSHC, LPS, TMF, GPT
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Comments (16)
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  • User 7508671
    , contributor
    Comments (4) | Send Message
     
    Thanks Chris. It is always interesting to see how past ideas work out.
    22 Nov 2013, 02:14 PM Reply Like
  • TimeOnTarget
    , contributor
    Comments (2785) | Send Message
     
    Chris --

     

    Looking at your charts and results, the total amount of percentage movement was similar to mine.

     

    Unfortunately, I wasn't shorting my longs . . . .
    14 Dec 2013, 03:58 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » Long idea for 2014: GCVRZ at $0.34

     

    Short idea for 2014: IPO at $21.86
    8 Jan, 03:21 PM Reply Like
  • JDanziger
    , contributor
    Comments (37) | Send Message
     
    I think these are both great, Chris but to keep it apples/apples, shouldn't you start GCVRZ and IPO from the prices you published your articles, not the first day of the year?
    8 Jan, 07:11 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » I could do that but it wouldn't really be apples/apples in that in 2009, 2010, 2011, 2012, and 2013 I had best ideas for the subsequent year. In each case I measured them from the beginning to end of the subsequent year. In no case did I publish the idea on or about midnight 1/1. This is all arbitrary in that the ideas have little to do with astronomy/annual calendar but it is consistent. I had ideas last year (GPT and TMF) which I stopped measuring once the clock changed. Given holiday/family/travel commitments, I won't be more precisely timed than that. Some past ideas are various places online (some here: http://bit.ly/1hx5BZ6). For what it is worth, I never contemplated there being any ambiguity on the meaning of "Every year since 2009, we publish one of our favorite long investment ideas for the coming year." Oh well. -C
    8 Jan, 08:01 PM Reply Like
  • bazooooka
    , contributor
    Comments (2874) | Send Message
     
    Chris,
    Thank you for your 2014 ideas. On GCVRZ I agree this should be a good call from current levels. Are you adding?

     

    And does the recent FDA decision in any way affect the bull case you laid out a few weeks back or did you anticipate the turn down? Also, what are your thoughts on averaging down for those who got in prior to 2014?
    8 Jan, 08:13 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » I have added, but the vast majority of my exposure is from the Genzyme deal.

     

    As for the FDA, I would highly recommend your commenting to the FDA if you have a view on their process and CRL: http://seekingalpha.co....

     

    The division was and is 100% against this drug and its sponsors. Higher levels of the FDA are undecided. I didn't know at which level the late December decision would be made. So, "did I anticipate"? No I did not.

     

    My thoughts on sunk costs are always that they should be ignored. The exit, in my mind, is always when there is a normal price, which in this case will only be in the form of payments or expiration. So, I've owned since the Genzyme acquisition and will own until they expire.
    8 Jan, 08:20 PM Reply Like
  • bazooooka
    , contributor
    Comments (2874) | Send Message
     
    Based on all my DD I agree with you that "The division was and is 100% against this drug and its sponsors"; thus I'm assuming no reversal on appeal and a few years more before the US comes into play (if ever).

     

    On those assumptions is 400M in sales achievable/likely? I ask because its hard to gauge how much of the bull thesis was based on near term FDA approval.
    8 Jan, 08:36 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » I think so.

     

    "So let's assume for a moment that we know the FDA will deny approval. In that instance, what is GCVRZ worth? At least $2.00, here's why.

     

    Lemtrada has already been approved for marketing and sales in 31 countries around the world, including Europe, Canada and Australia. The global market for MS drugs is about $15 billion per year and growing. We only need Lemtrada to hit $400MM in annual sales to reach the first sales milestone payment. Even if we make the worst-case assumption that the FDA flat out denies Lemtrada, our analysis leads us to conclude that it is very likely that Lemtrada will achieve that first sales milestone in Europe alone, and thus pay holders of the CVR $2 per contract."

     

    -http://seekingalpha.co...
    8 Jan, 08:44 PM Reply Like
  • JDanziger
    , contributor
    Comments (37) | Send Message
     
    Sure I understand that. In GCVRZ's case because of the adverse FDA ruling the price dropped by 50% from when the article was published, so the performance tracking is very much impacted by a few day difference in when the "clock" starts. Much more so than the more linear results from a conventional stock.

     

    Ultimately GCVRZ will either be worth 0, or 2+(which I think is likely) so it'll turn out more than fine. But for me I'd track the current performance of this one as down 50%…and maybe there's a lesson about ignoring mark to market in all this.
    8 Jan, 09:32 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » I'm sorry that it has not done better.

     

    It will eventually go to $0 or $12 or somewhere in between based on the various outcomes. I am extremely interested in those outcomes and their probabilities. I am less focused on day to day market prices. Stated another way, I own non-traded and operating businesses and am extremely interested in good outcomes, but spend no time daily recalculating what they are worth (it would be harder to do, but would be equally pointless).
    9 Jan, 06:10 AM Reply Like
  • bazooooka
    , contributor
    Comments (2874) | Send Message
     
    Also I'm unclear if the US totals can still be added toward the 400M if approval doesn't come until late 2015 or beyond.

     

    Thank you for all your efforts.
    8 Jan, 08:45 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » I think that it is reasonable to assume $0 in US sales. In theory, could they come later and count? In theory, yes.
    8 Jan, 08:47 PM Reply Like
  • bazooooka
    , contributor
    Comments (2874) | Send Message
     
    Great; makes sense to look at it that way. I will be watching the stock and Europe sales as I suspect there is still some opportunity here. My tax rebate money will need to be deployed soon anyhow =)
    8 Jan, 08:57 PM Reply Like
  • jacobtr
    , contributor
    Comments (330) | Send Message
     
    Do you think the FDA issue in the US will affect doctors' prescription behavior in EU?
    9 Jan, 02:34 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4352) | Send Message
     
    Author’s reply » I don't know. However, were I a clinician or a patient, the views of the bureaucrats in the FDA would rate no higher than the views of randomly selected people from the phone book.
    9 Jan, 02:47 PM Reply Like
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