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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
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  • The Sotheby's Test 11 comments
    Apr 3, 2014 11:56 AM | about stocks: BID

    Want a simple test for determining whether a given environment is ripe for long opportunities or short opportunities? It is my Sotheby's (NYSE:BID)/ Loews (NYSE:L) test. BID is where rich people spend their excess liquidity. High BID share prices indicate a decent likelihood that the capital markets are also pretty well picked over in terms of bargains on the long side, such as is the case today. Loews is run by a team of brilliant asset allocators who are at the pinnacle of the value investing tradition - they buy low and sell high whether it is at the corporate or security level; they are honest money makers for their shareholders and they don't care if anyone notices. They act like owners because they are large owners. What premium to NAV do assets run by the Tisch family deserve? I can't calculate it precisely, but it would be a substantial one. So, from time to time when I can buy more L shares at a substantial discount to NAV, as was the case in the financial crisis, then I determine that Mr. Market has lost his marbles and I look for additional such bargains.

    - Chris DeMuth, Jr. Positions For 2014

    Need proof of a speculative bubble?

    Closely watched hedge fund manager Jim Chanos says he has the best barometer for gauging where 1 percenters are putting their money, given the Federal Reserve's easy money policies that have been fueling their portfolios to record highs. During an interview Thursday on CNBC's "Squawk Box," he pointed to the stock chart of Sotheby's.

    - Sotheby's? The best indicator you've never heard of

    Disclosure: I am short BID.

    Additional disclosure: Chris DeMuth Jr is a portfolio manager at Rangeley Capital, a partnership that invests with a margin of safety by buying securities at deep discounts to their intrinsic value and unlocking that value through corporate events. In order to maximize total returns for our partners, we reserve the right to make investment decisions regarding any security without further notification except where such notification is required by law.

    Themes: L Stocks: BID
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Comments (11)
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  • Whopper Investments
    , contributor
    Comments (178) | Send Message
     
    Can motifs go short yet? This would be a fun one to run / invest in (edit: for clarity, a long L / short BID motif)
    3 Apr 2014, 12:36 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4750) | Send Message
     
    Author’s reply » Not yet, but I am working on that issue with them. Hopefully soon. -C
    3 Apr 2014, 12:37 PM Reply Like
  • Ruerd Heeg
    , contributor
    Comments (711) | Send Message
     
    Can you ask them to allow Dutch residents as well? At the moment only US residents can trade.
    3 Apr 2014, 02:56 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4750) | Send Message
     
    Author’s reply » Will do. I'll see what they say.
    3 Apr 2014, 03:04 PM Reply Like
  • TMFDeej
    , contributor
    Comments (159) | Send Message
     
    Hi Chris. A bet against BID is a direct bet against Dan Loeb. I think that it is entirely possible that he can squeeze more upside out of the stock. He has been very successful in the past. Thoughts?

     

    Jason
    3 Apr 2014, 12:55 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4750) | Send Message
     
    Author’s reply » Loeb is terrific and he might be right; we'll see.
    3 Apr 2014, 02:06 PM Reply Like
  • byslkwd
    , contributor
    Comments (114) | Send Message
     
    In addition, Marcato capital, run by highly successful activist Mick Mcguire, (you actually quoted him once in a stock talk) has 10% of his fund in BID. Not people I would like to be betting against.
    3 Apr 2014, 02:02 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4750) | Send Message
     
    Author’s reply » I am a big fan of his too.
    3 Apr 2014, 02:07 PM Reply Like
  • Robin Heiderscheit
    , contributor
    Comments (2094) | Send Message
     
    So wait a minute Chris, you invented the Sotheby's indicator???? If so Chanos should have offered you a hat tip.
    4 Apr 2014, 03:16 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4750) | Send Message
     
    Author’s reply » Sotheby’s (NYSE:BID) hits a new 52-week low
    8 Aug 2014, 12:45 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4750) | Send Message
     
    Author’s reply » The Sotheby’s Indicator: http://bit.ly/1oxBdBR
    14 Aug 2014, 01:22 PM Reply Like
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