49

Taking stock

Disclaimer / Disclosure

I turned 49 today. I am not that big on adult birthdays, but approaching my 50^th in a year has me taking stock of the next year. Here it is.

Family and friends

I hope to be a good son, brother, husband, father, and friend. You’ll never know why some things work and others don’t. In my experience, relationships that seem inexplicably strong are more valuable than they appear. Those that seem inexplicably weak are worse. Don’t equal weight relationships. Reallocate all of the time and energy from the bottom 75% to the top 25%. Spend even more attention further cultivating the best relationships. The range is so big. There are some people who will always be strangers and who make you feel bad, even with their compliments. Others just know you – they make you feel good, even with shit talking insults. Protect them at all costs.

Rangeley/StW

I want to focus better. Inbound topics sometime feel like a game of “whack-a-mole”. The modern world generally has chopped attention spans into ever shorter increments. I want to resist. I am certain that sustained focus leads to my (and others’) best work. I want to lean into everything that helps me go deeper and fade everything superficial. There is a great opportunity set, but the best ideas take time to research and exploit. Golden Entertainment, Inc. (GDEN) is a recent one that makes the cut, but it will take time and sustained effort to exploit for profit. The risk:reward is great but the management is cynically exploiting their position for personal profit which will take outside shareholders’ resistance.

Passive

The goal of ideas such as the above is to beat the market. It is also to reduce overall correlation with the market. But I also want to own the market. I am all in on direct indexing for that exposure – both investing in and on a direct indexing platform. So far my direct indexing l/s investment compounded at a 27% IRR pre-tax, which understates its case. It also has simultaneously harvested tax losses at a 22% IRR, so the after-tax impact far exceeds 27%. The value of tax losses vary between individuals and years, but the after-tax compounding is well into the 30s%. For the next year, my plan is to amp up the exposure from 140 long / 40 short to 250 long / 100 short, keeping the same net market exposure but increasing the tax loss harvesting potential.

Taxes

Speaking of taxes, December is the time to ponder unloved 2025 losers that could pop in January after getting beaten down by tax loss selling. WLFC is my favorite candidate for that category with honorable mentions to SNFCA and ASLE. WLFC has an ~$812 million market cap. Their engine portfolio alone is worth ~$750 mil. They have orders worth $100 million. They have join ventures worth another $100 million. So I can get to more than today’s price on assets, orders, and JVs. I like their business and love not having to pay for it.

Health

This year I hit my rowing goal of 2k meters in 7 minutes. This next year I want to hit a 1k powerlifting total between bench press, squats, and deadlift. I had never measured my one rep max in any of them until this past week but hit 275 bench, 315 squat, and 405 deadlift (and tossed in a 185 strict press while I was measuring). So that gets me to 995 which is closer than I expected, having been only at ~900 lbs. for what I normally do for higher reps. I invested in and am a customer of a telehealth platform that I hope will help get me there with supplements that will help optimize my hormones. Dialing in hormones make hard things fun. Anyone interested in my ego bruising (and body bruising) efforts in the mountains, in the CrossFit box and on the jiu jitsu mats can follow such things here.

Charity

Much of what I do ultimately benefits my charities especially my effort to fund needed medical procedures for people who can’t afford them. Thanks again to everyone who participated in this year’s successful campaign to fund life-changing healthcare for people around the world. Anyone can set up a donor advised fund (DAF) like mine to organize tax-efficient and effective giving. The non-profit world is at least as cursed with charlatans as the for-profit world so I only support organizations where I have longstanding reasons to trust the leadership. Happily that is the case at both Watsi and Daffy.

Gifts

Verbs > nouns. I love giving activity gifts to loved ones – something fun that also adds to skills. As an adult, I spend most of my free time outside of work trying to improve practical skills that I enjoy cultivating – mostly CrossFit, jiu jitsu, tactical shooting, and mountaineering but with odds and ends including blacksmithing (and am looking to learn welding). I love gifting lessons in such things so that I can hopefully pass on both the fun and the skills.

Hardly worth mentioning (except for my admitted addiction to quirky everyday arbs) but I have a small handful of $50 gifts on the OKX platform that I need to handout within the next five days before they expire worthless. First come first served until they’re gone. Sign up here for their app (I %^@&% hate apps and far prefer desktop but this is the way the world is headed with or without me). Deposit $200 (which also gets you a $150 sign up bonus). If you want, you can also get a 5% deposit match up to $250 for depositing $5k. Then send me your email address that you used for this and I’ll send $50 per person until I run out.

I love honoring loved ones with charity gift cards. You can gift charity cards for a beneficiary of the recipients choosing which is a great way to get young people thinking about giving which not cluttering up their rooms with tchotchkes. My favorite gifts to receive are Watsi gift cards. I was sent one years ago by a particularly generous investor and friend whose gift changed the course of my philanthropic efforts.

With gratitude from a definitely older and possibly wiser

Chris DeMuth Jr (1976 - )

ccdemuth@rangeleycapital.com