"Plenty Of Pain" Likely In 2023, Higher Rates Still Not Priced In: Chris DeMuth
The latest from one of my absolute favorite investors, in an exclusive for Fringe Finance subscribers.
I’m incredibly stoked to be able to bring you exclusive 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 exclusively for Fringe Finance subscribers this week.
In this piece, DeMuth updates some of his investing takes that I published back in October.
Chris DeMuth Jr founded event driven hedge fund Rangeley Capital and research service Sifting the World. Rangeley’s strategy is to invest in mispriced securities with limited downsides and corporate events that unlock shareholder value. He also hosts Sifting the World, Seeking Alpha’s SPAC and event driven research product.
Chris also writes the Vale Tudo Substack, which can be found here.
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 & does not constitute investment recommendations. Nothing is a solicitation to buy or sell securities.
Life, Love & “ESG”
ESG has been on my mind. Specifically, how people who like to talk about humanity in broad vague terms and their plans for saving us (Bill Gates, SBF, etc.) are not really living up to it so well in their own lives and that ESG generally as a virtue proxy fails both at investing and at virtue.
At the international level and national level – in politics and in markets – we should refocus on interests. That brings me to looking at companies with aligned majority owners such as WLFC.
At the local and personal level – we can look for love / meaning but that has to be retail and can’t be done in these grandiose sweeps that the ESG people want.
The reason is that what we’re looking for is authentic connections to people who know our true selves and want to do consequential things together and this can be done with only a handful of people – maybe two or three, maybe ten or twelve, but beyond that it is mostly BS. Mass market is not really authentic in the same way; it is performative. And performative relationships make people miserable.
So much of our problems on social media, in politics, and in investing, is in trying to find answers to personal/local holes with wholesale/universal solutions and it fails on every conceivable front. We should invest to make money. We should refocus our other searches to our own lives. If someone was getting laid, getting fit, and had a few friends who knows who he actually is and loves him anyway, he wouldn’t be looking to the wide world for happiness/meaning/identity. ESG is just a bunch of people looking in the wrong place.
The Macro Picture Heading Into 2023
Both equity and credit markets remain expensive and risky in general. Hopefully there will be interesting new distressed opportunities amidst the wreckage next year. The Fed has been too slow and timid, but as it makes up for so much lost time, markets have not come close to fully reacting.