NTNX - Sifting The World Day One

2023-09-14 15:00:05 ET

Summary

• Here is an introduction to Sifting the World for new readers.
• Join, subscribe, or simply follow for a new idea within the next week.
• Q&A on StW and me as I am launching new, free content shortly.

One

Welcome to day one of Sifting the World . You may have been a member for ten days or a hundred or a thousand, but for many people reading this it is your first so thanks for reading. And if you’re a regular already, then here is a refresher on some basics – who I am and what I do and then write about.

Ideas

This is more personal and casual than long-time subscribers are used to. I offer edgy, actionable ideas that I believe have significantly discounted security prices and events likely to reveal, unlock, and return their value. My hope and expectation is that this will be lucrative and edifying for everyone that reads them for the long-term.

Context

But I want to first offer this introduction so that readers know who they’re dealing with and what they might be getting themselves into. Most importantly – I’m so selective that: 1) I read 100x more than I write and say “no” to virtually everything I consider buying. So if you don’t hear from me, it is because I’m reading instead of writing.

Selectivity

I offer fewer ideas than you can find elsewhere. There are no hot takes on the latest mega cap tech earnings call or utterance from the fed. When CBNC says “all eyes are on” x, then mine are elsewhere, where no one is looking or everyone is panicking. Deep research takes time and I hate digging shallow holes.

Introduction

My name is Chris DeMuth Jr. I research companies and invest in their securities. I like underpaying and getting back the full value of what I paid for. 99% of what I do is at my day job as a hedge fund portfolio manager. Much of what I write about is based on that research. But this intro will go into the other 1% -- my personal investing and life.

Priorities

I spend about half of my waking hours reading and researching companies to understand what they’re worth and if they have mispriced securities to buy. The other half I spend with my family and on fitness. My ultimate goal with both is to be able to live freely – to travel where I like doing activities I enjoy with people I love.

Q&A

What is your favorite commodity?

Uranium via Sprott Physical Uranium Trust units (SRUUF, U.UN:CA ). It has done well so far but still has a ((VERY)) long way to go from here. Quantifying its upside (and downside) is difficult, but I’ll more or less hang onto around my current size in dollar terms, reducing units in $10 increments or so – smaller at C$30 and C$40 then probably out at C$50 per unit.

What do you like to read?

I read a lot, mostly SEC filings and call transcripts on companies I research but also research papers and books. Here are some of my favorite books for investors. Thematically, I’m interested in understanding mispricing in all of its forms – wherever superficial and deep understanding has diverged and might reconverge.

What is your favorite cause?

Once I could afford my own consumption needs and wants, I became increasingly interested in philanthropy; benefiting these causes is my ultimate goal in the marketplace. My favorite cause is healthcare, especially for kids outside of the developed world. To this end, I’m currently raising money for Watsi .

Push-ups

To date, I have funded healthcare for 483 patients in 13 countries and have had the chance to visit many of these countries. But I am constantly doing side projects such as an upcoming push-up contest to raise money for kids with cancer. This combines my love for fitness with an eagerness to support a good cause.

What do you do when you’re not researching?

Mountaineering, jiu jitsu/MMA, CrossFit, and trail running mostly. I’m not expert in any of them but enjoy doing physically hard things. My mind is most at ease when forced to focus on one task, the more consequential the better. I love ice climbing and marital arts because they require focus. I write a bit about my non-investing from time to time.

What kind of ideas have you written about?

My ten most recently completed investment ideas include MMP , NTPIF , HZNP , ATVI , GLOP , UNTC , ROIV , NTNX , SPB , and WLFC .

For the current list, please subscribe !

What else do you do with your money?

If I buy any position at work it is with the intention of putting millions of dollars to work. At home, I can harvest little ideas with terrific risk: rewards and IRRs even if they’re not scalable. For example, I love harvesting sign-up bonuses. I shift cash around to get every freebie I can find whether it is free cash or stocks.

Save

Want an example? I put $1k in a 1-year term and $5k in a 5-year term market savings account at Save . This is my favorite place to park cash: tax-efficient and principal-protected/FDIC insured market-linked yield. Between the returns and lavish sign-up bonus, I have gains of over 57% with no downside beyond potential opportunity cost.

Moomoo

Want another? Another $5k deposit has done twice as well as Save (albeit with downside risk this time). I deposited the money in Moomoo , a retail-oriented trading app desperate enough for customer growth to pile on another convoluted but lucrative sign up bonus. Net of my returns and bonus cash and stock, it doubled so far.

What about taxes?

I hate ‘em. I hate their cost, their distortion, and their funding of malinvestment. To think that our forefathers fought a revolution in part over a modest usage fee while we happily slave away for the government for half the year. I prefer to hold shares for over a year, to trade sparingly, and to max out all tax-advantaged opportunities.

529s

Max out your IRA, set up PPLI, move to Wyoming , own a breakeven hold co, and do whatever it takes to legally minimize taxes. And max out a Vanguard Nevada 529 for each beneficiary. This starts a 15 year clock of tax-efficient compounding before excess funds can be shifted to a Roth IRA.

$1 million

You can even put in $1 million with yourself and your spouse beneficiaries. This will save a fortune in taxes and also creates a nice way to hedge yourself and the allocation is passively managed. Pick stocks elsewhere, but this one is safe(r) from the government… and from yourself.

What stocks do you own?

I own only one stock individually. It is undervalued. There is a specific catalyst likely to unlock its value. Short-term: it is in survival mode. The market suspects it could die. My strong view is that it survives. Legislation within the next year could transform its business. If it gets regulatory clarity, it could sell to a strategic acquirer for 10x its current price.

Where?

You can be the first to get this and all of my best ideas here . Or if you’re not ready to commit, you can also simply click the “follow” button here . Those followers will get an explanation of why a highly improbable stock is the only one I individually own. It isn’t well-known. It isn’t big. It isn’t liquid. But follow me if you want to understand it.

Thanks

Thanks for joining me on day one to get an introduction (or re-introduction) to Sifting the World and to me. The next year is guaranteed to be interesting – hopefully one that increases our wealth and knowledge – while having some fun along the way. Thanks for humoring me on a self-indulgent project where I literally am talking about my book!

Chris DeMuth Jr

New Canaan, Connecticut / Rangeley, Maine

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