Episode 27: Equity Investing Through a Creditor’s Lens w/ Jeremy Raper

Macro-ops

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Today’s guest is Jeremy Raper. Jeremy runs RaperCapital.com and recently launched a premium investment research service.

Jeremy looks at public markets through the eyes of a credit analyst. This gives him a unique perception on markets, companies and capital structure situations. He’s not afraid to invest all along the capital structure, and often writes about unique long/short bond opportunities.

Before launching his premium research service, Jeremy worked over a decade on both the buy and sell side research departments. He even spent time in Japan doing equity/credit analysis.

During our chat we talk about Jeremy’s investment process, the edges gained while living/working in Japan, how he finds ideas and how he thinks about valuation/risk.

Here’s the podcast outline:

  • [1:10] – Lessons From Playing Tennis
  • [3:00] How Jeremy Got Started In Markets
  • [6:15] Lessons From The Buy & Sell Side
  • [8:35] Jeremy’s First Taste in Credit Instruments
  • [26:00] Jeremy’s Four Pillars of Investing
  • [32:12] Portfolio Construction and Allocation
  • [35:24] How To Extract Value From Net Nets
  • [39:51] The Pendulum of Shareholder vs. Customer Focus
  • [43:42] Returns ON Capital vs. Return OF Capital
  • [56:00] How To Avoid Value Traps
  • [60:00] Sustainable Free Cash Flow Definitions
  • [69:00] Jeremy’s Three Buckets of Idea
  • [74:28] How To Prioritize New Investment Ideas
  • [80:00] Kill Your Ideas Quickly
  • [84:33] If The Price Is Right, Look Deeper (CLMT)
  • [93:18] Real-Time Example of Credit Analysis (361 Degrees)
  • [105:46] Finding The Main Drivers of an Investment
  • [108:19] Raper Capital Premium — What To Expect
  • [118:28] Closing Questions

If you want to learn more about Jeremy’s research, head over to his site RaperCapital.com. Also make sure to follow him on Twitter @puppyeh1

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