Always ask for more. More work, more promotions, greater salary, more opportunities.
Sandy Chin has 20 years of experience covering consumer staples, launching the first consumer staples focused hedge fund Tidal Bore Capital in 2016. Sandy believes firmly that these staider stocks can have attractive returns and are misunderstood, which can offer an ability to capitalize on the disconnect between a company’s top down view versus a bottoms up analysis. Prior to Tidal Bore Sandy worked at Visium Asset Management as a portfolio manager. She was a senior analyst at SAC Capital Management for three years prior in the years 2010-2012. Her first foray into hedge funds was for three years at Moore Capital Management from 2008-2010. Sandy spent five years working at the long only Neuberger Berman as a Vice President and senior analyst with her mentor of 10 years. Before joining the buyside Sandy and her mentor worked on the sellside at Banc of America and Donaldson, Lufkin & Jenrette. She obtained her MBA from NYU’s Stern School of Business and received her BA in political science from Barnard College, Columbia University.
Sandy speaks French proficiently and studied Russian in college and has some working knowledge of Russian. Sandy lives in New York City with her partner, who launched his own generic pharma company. They have two rambunctious children Nolan & Taggart ages 4 & 6. Sandy is an avid reader and collector of books and her children are named after the protagonist in her beloved literary books. She has been a New York Rangers ice hockey fan since middle school and almost snuck into City Hall when the Rangers celebrated their Stanley cup win in 1994, while she was interning at the Public Advocate’s office. Attending hockey games with Sandy can be very intense. At every opportunity she will be gardening and growing an assortment of herbs and flowers and plants. She has an enthusiasm for great food and enjoys trying and eating anything. Her 12-year-old dog Abby gets home cooked food but Sandy’s cooking skillset, to date, is not fit for human consumption. When not running after her children Sandy will run and weight train. She prefers shore fish when any opportunity arises though the results are not as prolific as via a boat. Travel has been a lifelong love for Sandy and her dearest friend from a high school exchange program in France has become family with shared vacations and homes for the past 28 years with a recent summer trip to the South of France to see these friends who have become family. Sandy is a fraidy cat so Murder She Wrote and Scooby Doo are the extent of scary shows she would willingly watch. Sandy was an devoted reader of science fiction and fantasy books growing up and looks forward to instilling that love to her children. Volunteering at her children’s schools and participating in existing school committees and chairing new ones have been a recent passion. Sandy is not musically inclined but enjoys going to karaoke night and getting others to sing and perform.
Where did the idea for your company come from?
I was a political science major at Barnard College, Columbia University and deferred law school. In the interim I was hired at Donaldson, Lufkin & Jenrette (DLJ) a storied sellside research firm. I met my mentor who I worked with for 10 years across three companies, working on the sellside and then the buyside.
What does your typical day look like and how do you make it productive?
I check emails and headlines for any news on companies in my universe and on a tertiary level I will review headlines and research notes on companies one degree separated from my sector, consumer staples, to look for any read throughs that could impact my sector and specific stocks. Speaking to sellside analysts and chatting with other buysiders enable me to build a broader picture on the sentiment of a stock. When the market opens the focus is on any outliers in my portfolio and why they would be moving in any given direction. Updating financial models and my proprietary spreadsheets on various variables that impact my space takes up the bulk of the day. Often there are sellside industry conference calls, meetings and various investor days and conferences through out the year. Due to covering food, beverage, household product and tobacco companies, every single month there are companies reporting. Earnings season has a long tail and during earnings season it can be a triage mentality; assessing the earnings news as soon as it hits, updating models to see if there are any disconnects between the news and fundamentals and the stock movement and getting on earnings conference calls for every company in the portfolio. Many of the stocks report after earnings though the majority is premarket reporting.
How do you bring ideas to life?
Finding high convictions requires a specific approach that I’ve utilized for 20 years. I’ve trained myself to synthesize information quickly due to my long tenure focusing on one sector. This enables me to have nuanced trades generated by using pattern recognition and knowing tenets vital to consumer staples. I also have active dialogue with management for my companies and have developed decades long management relationships. Robust modeling and implementing my aggregated metrics is the trifecta in finding ideas for my portfolio.
What’s one trend that excites you?
Cannabis legalization entering the consumer staples arena. Many companies cannot participate in the sector except via acquisition and beverage companies have been the most avant-garde in trying to participate in this burgeoning trend.
What is one habit of yours that makes you more productive as an entrepreneur?
Utilizing extensive pattern recognition in my modeling, when speaking to managements and analysts and when following stock movements.
What advice would you give your younger self?
Always ask for more. More work, more promotions, greater salary, more opportunities.
Tell us something that’s true that almost nobody agrees with you on.
Consumer staples can be an exciting sector to cover all on its own with the potential for robust returns from companies that have strong cash flow and dividend yields and generally lower beta. Oh and airplane and camp food can be tasty!
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Must build your own quarterly and annual models. One cannot build high conviction stocks in their portfolio if they borrow sellside models and tweak some line items. Building the models and maintaining them quarter in and quarter out helps build the pattern recognition and provides confidence in seeing the disconnect between fundamentals and valuation.
What is one strategy that has helped you grow your business?
Never turn a meeting down from anyone, be it a junior analyst from a no name sellside shop to a small market capitalization company that is just entering your space. You will never know if you’ve uncovered a tidbit that enables you to complete the mosaic on another company or if that company or analyst is a future success. These analysts and companies never forget early kindness and enables you to build strong, years long relationships.
What is one failure you had as an entrepreneur, and how did you overcome it?
Having a too much exposure in a sub sector within my universe caused my portfolio to take a hit. Going forward I implemented new restrictions that forced me to look at the exposure across the subsectors in my space so I never have more than 8% exposure in any one group of stocks.
What is one business idea that you’re willing to give away to our readers?
Dog rental service via an app (background checks of course!), scheduled for peak dog walking times so your dog gets walked and the renter gets play time with a pooch.
What is the best $100 you recently spent? What and why?
Soft cover spiral notebooks in two colors and Bonsaii retractable gel ink pens in black and uni-ball micro point in red. Taking notes is vital to retaining information gleaned from companies and analysts. Using two color pens helps delineate different types of information received.
What is one piece of software or a web service that helps you be productive? How do you use it?
Box.com. It enables me to access my models, reports and notes from anywhere.
What is the one book that you recommend our community should read and why?
“Atlas Shrugged” by Ayn Rand. Not for the political implications (of which I argue Rand would balk at the present-day usurping of her ideals) but for the sheer force in recognizing your own will is necessary, and no one else’s, to accomplish your goals.
What is your favorite quote?
“I swear, by my life and my love of it, that I will never live for the sake of another person, nor ask another person to live for mine.” – John Galt
Key learnings:
• Learn to hone years of experience in a sector to synthesize information faster than your peers and take on high conviction ideas.
• Build your own quarterly and annual models for every company in your universe to better implement pattern recognition in the line item variables.
• Never turn down a meeting from any analyst or company no matter how junior or how small, the potential to uncover a tidbit.
• Develop strong relationships with management derived from years covering the same sector.
Connect:
Mario Schulzke is the Founder of ideamensch, which he started a decade ago to learn from entrepreneurs and give them a platform for their ideas.