Submitted by QTR's Fringe Finance
I’m incredibly stoked to be able to bring you content from one of my favorite investors, Chris DeMuth Jr. Chris took the time to prepare his up-to-the-minute thoughts on the market for Fringe Finance subscribers this week.
Chris is one of the smartest people I’ve had the chance to meet during my time as an investor. He was one of the first people to ever take a phone call from me in the early 2010’s when I first started looking at the Questcor/Acthar scam. He was also one of the first people to be nice to me when I got my start on Seeking Alpha back about 10 years ago and is also widely respected by many people whose work I admire and follow.
All information contained herein is opinion only of Chris DeMuth & does not constitute investment recommendations. Nothing is a solicitation to buy or sell securities.
Where No One Is Looking Or Everyone Is Panicking
Professionally and personally, I focus my research on opportunities in areas where no one is looking or everyone is panicking. At work, that often means scale mismatches and firable offenses.
Scale mismatches: a spinco or merger security is too trivial for the predecessor owners to care much. They just sell price insensitively without doing much work. Someone, maybe some one at a long-only mutual fund that gets paid a management fee but isn’t all that attached to performance, gets a spin-off such as OmniAb (OABI) that doesn’t fit his narrow mandate. It isn’t the right market cap or sector. He just sells it. A non-tradable contingent value right (CVR) is part of a biotech merger. An index fund manager would get something that isn’t in his index. He just sells it. Amryt (nee AMYT) was a recent one. We bought a significant stake in the company for $0.17 net of the cash we got back in their merger. Just weeks later, the FDA...(READ ALL OF CHRIS' IDEAS FOR 2024 HERE).
