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

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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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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.

AK

Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.