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Todd Harrison Interviews Scott Reamer: The Story of Jackson's Honest Potato Chips


Chora Capital's Scott Reamer explains how his Wall Street experience helped him discover a dietary strategy that eased his son's mysterious illness, and how that solution later sparked a family business.

Last week I received an unexpected email from an old friend, Scott Reamer of Chora Capital. He had some exciting and inspiring news about his wife's new business venture and his young son's health, and the two were related. He wrote:


Just had to share this news with you. Megan started a potato chip company called Jackson's Honest Chips last summer -- based on the nutritional aspects that we saved Jackson's life with back in 2004 (e.g. coconut oil and other "real fats"). These chips are fried in coconut oil. Long story short: They have been an enormous hit -- she's sold them in eight countries (Australia and UAE for e.g.) and 44 states in just the first few months. But here is the kicker: Just Wednesday this week they were selected by the 85th Academy Awards product selection committee to be the exclusive snack food for the green room, executive suites, backstage, production offices, and dressing rooms at the Dolby Theatre this Sunday. It's such an honor because there is no "buy-in" for placement; the Awards producers choose which brands to align themselves with based on the story, quality, etc. Since you saw in real time some of the depths that Jackson's illness took us physically and emotionally, I thought it only appropriate that you see the way he's been able to inspire us to turn lemons into lemonade.

Thrilled with the news, I immediately set up a call with Scott to learn more. We both felt it was a conversation and story worth sharing with Minyanville's readers.

Todd Harrison: Earlier today, I went back and read your Going Home article on Minyanville from June 2003. So for those who have not been around Minyanville for the last decade, why don't you just give us a brief backdrop on your family, your personal history, and perhaps where you and I first connected.

Scott Reamer: Sure. Well, you and I met back in the days we both wrote at and of course, you branched out on your own and asked me to write, and I thought, that's a noble mission, so I thought I would. At the same time, I had started my own hedge fund and wasn't doing so well. While I was fighting the tape, my young son, who at the time was about 12 months old or so, our first son, Jackson, came down with some sort of neurological disorder -- at least that's what we knew it to be then -- that was slowly but surely basically taking away all of his gross and fine motor skills. It started at that time.

The genesis of that article was really sort of this terrible nexus of fighting the tape, doing a ton of research -- stock-picking and the other tools we used -- and not having it work out too well. It was the first time I started a fund and I had just left the sell side, so there was a lot of pressure. In parallel, Jackson's health started to degrade for reasons that we couldn't figure out. We were seeing an untold number of doctors and specialists across the pediatric spectrum, and none of them had any insights at all. They'd sort of send you home with, "Good luck."

So it was, as I said, this terrible nexus of, in effect, two very stressful times: one, a personal path, and then the other, the professional path, and each of those was an incredible challenge at the time. The genesis of that article was that multiplicative effect of having both the professional and personal lives deal with incredible challenges at the same time.

Megan Reamer
TH: As I'm now a father, I can begin to understand, or at least fathom, how helpless that must have felt. I recall in the summer of 2003, about a year after Minyanville was launched, we were talking with increased frequency. You offhandedly said to me, "Why don't you invite the Minyanville community to Crested Butte, Colorado [where Scott has a home], and in a worst case scenario, we'll have a holiday party in August!"
Sure enough, that summer we had the first of our Minyans in the Mountains. Loads of people journeyed to Crested Butte, which isn't the easiest place in the world to get to. I think some people are still looking for their luggage. And that turned into a series of soirées ranging from Minyans in the Mountains to The Critter's Choice Awards to our annual Festivus -- it was the genesis of the benevolent spirit that has come to define the Minyanville community.

I vividly remember you going through personal and professional challenges, and I was having challenges as well, having just started Minyanville, launched a hedge fund, and been wrong on the tape; I felt pretty much helpless. We commiserated together at the time, I remember; times like that are when you find out who your real friends are.

Now, to this day, I consider you to be one of the smartest people I've ever met and I'm not prone to hyperbole. Not a surprise you're still mixing it up in the market after all these years, after the incredible sequence of events we've witnessed in the financial markets. It takes certain capabilities to navigate that, and balance life along with it.

But sticking with the story, and most importantly, tell us how Jackson is doing. Fast-forward 10 years.

SR: Sure. Well, we know a lot more about the physiological processes that are going on. We still don't have a name, a diagnosis. We don't know what the underlying disease process is necessarily. We know some of the effects, of course. So we were able, actually, to basically intermediate whatever the disease process was through nutrition, through changing what he ate. And we started to make real progress in that in 2004, 2005, 2006, and it was just through experimentation.

So fast-forward to today, Jackson is happy. He's still incapacitated, in a wheelchair. He can't speak, can't feed himself, but mentally he's all there. There are no cognitive defects at all, he just can't physically move, which is to say that he has no fine motor control. So whatever this process is, which we now know is at least some neuroimmunological process, an inflammation, in effect, of his basal ganglia that prevents the coordination of the motor neuron signals to his muscles, it doesn't affect him cognitively, which is fantastic. He's happy. He laughs. He has a great time with my three other kids.

So that's, of course, the blessing of this all. It's important to move. It's important to communicate, of course, but he's with us mentally and physically, and that is an incredible return on what we thought in 2004 was a terminal illness.

The interesting part is that we were able to, in effect, just sort of reverse engineer a diet that worked for him, and it was a diet that was a complete antithesis of what might be considered your standard American Medical Association prescribed diet. And that is huge amounts of fat and protein, which we now know is, in effect, the paleo diet. We reversed into that, or I should say we arrived at the paleo diet after an enormous amount of experimentation with what did and didn't work, taking things out of the diet, putting things back into the diet.

Not to stretch the parallel here, but I've got to tell you that my background in chemical engineering, and then on Wall Street, where in effect you were trying to reverse engineer the factors that affect a stock price or a bond price or a commodity price or what have you, or try to understand the macroeconomic machinations that are taking place in the economy worldwide, and then try to, again, determine some sort of investment action or speculative action to take on that, all of those skills actually helped immensely in trying to, in effect, find a diet profile that worked for him.

So there are some interesting parallels, not just in the sense that the timing of my professional challenges coincided with the timing of my personal challenges, but that the skill set from one kind of transferred to the other.

TH: That's got to be a very challenging, to put it lightly, a very challenging process, effectively becoming a nutritionist with a hit-or-miss characteristic. A binary outcome, if you will, with your son as the patient. I couldn't imagine. I mean, after every meal you were basically watching for his reaction to these foods?

SR: That's exactly right. That is precisely right. And actually, there's some incredible parallels in the financial industry and the medical industry, too, insofar as that, what we found is that -- I guess we were naïve in going into the process. We said, these experts, they spent years, decades in some cases, writing research, coming up with theories, testing them, etc. And hey, with the body of the knowledge and medicine, someone has got to be able to figure this out. But lo and behold, 10 years later, and no one still is able to figure it out.

So it was this man-behind-the-curtain kind of moment for the first few years, or several moments for the first few years, where basically doctors and specialists, they look inside the normal bell curve. If it's not within two standard deviations of what they normally see, they just throw up their arms, the vast majority of them, 95% of them. And this is true of investors, academics, politicians, economists. If it's not within their purview of what they normally see, very, very few of them will go out onto the edge of the distribution and try to figure out what causes that event, what causes in this case some extraordinarily rare constellation of symptoms, for instance, and what that constellation of symptoms might actually point to.

To me, the most incredible thing, both for you and for your readers, is the parallels between the finance business and the medical business at large. And again, to reinforce the point, being somewhat a contrarian from a finance standpoint helped immensely to find, in this case, the diet that helped Jackson. Because everything was on the table. We didn't have any sacred cows. There were no preconceived notions. All we cared about was, at the time, saving his life, and then later on optimizing his happiness. And we did that without coming to it with a prescribed set of recipes. What you see now and you've seen in the last few years since the credit cycle blew up in 2008 is just a series of prescribed recipes being applied again and again and again, without really any sense of whether they're going to work, but let's try it anyway.

TH: That's the "drugs that mask the symptoms versus the medicine that cures the disease" analogy that continues to play through, and has in turn, shaped the mindset for so many. I have to ask, because I know now, as a father of three, when one of my kids is sick, as a parent all you want to do is just assume that pain and make it go away. How has the rest of your family -- it could not have been easy for your wife and three other children. How have they gotten through this as they have?

SR: In hindsight, much healthier than I originally worried. Kids themselves, of course, are enormously flexible and resilient to all sorts of challenges. Kids, not just physically but also mentally and emotionally, are incredibly resilient. But for my wife and me it was obviously very, very difficult. Uncertainty generally is very difficult for human beings to handle. Human beings are entropy-reducing animals, and any amount of uncertainty -- and obviously, death is the ultimate uncertainty --

TH: Or the ultimate certainty, depending.

SR: Yeah, good point. Facing that with any sort of regularity, it's like a car accident every day. It was incredibly difficult. And the physical and emotional tolls were unmeasurable, really, and stay with us to this day. But having said that, we look back on it and see a lot of silver linings, and those silver linings are, we all eat this way now, and that's fantastic. And our appreciation for our friends and our family and our lives and what we do have, is just unbounded now.

So it's one of those, look-into-the-chasm kind of things. When you're on the other side, gosh, it feels incredible. The whole new perspective that it gives you is really a wonderful gift. But while you're in it, there's clearly nothing more powerful, and we were in it for years, dealing with that uncertainty and dealing with the likelihood of his passing.

There are two parts of it. The worst part you go through that you don't want to go through and you don't want anybody else to experience that, and then in this case, the positive outcome on the other side where we were able to save his life and intermediate whatever the disease process is. And we look back and say, gosh, we're lucky, and look at our lives now. We're blessed to have three more kids, with a great family and friends, good jobs and things like that, and a lot of fun things happening.

TH: It's the old adage, in order to get through it you had to go through it.

SR: That's exactly right.

TH: So this is an incredible story. For those who don't know, Scott and I have known each other for, as you said, well over a decade. He contributed to Minyanville in the early days. We're talking back in 2002, 2003; I think that's when Jackson's illness first started to demonstrate itself. And it's been inspirational to watch you as a father and as a person, knowing you all these years as I have. We recently reconnected and you shared with me the story about Jackson's Honest Potato Chips. Can you talk about that a little bit, please? It's pretty impressive.

SR: We adopted this sort of nutrition, which ultimately became the paleo diet, in effect. It's heavy on proteins -- grass-fed meats and things like this, as well as traditional fats. Not polyunsaturated vegetable oils that are made in some industrialized manufacturing process in the Midwest, but really cold-pressed olive oil and lard and tallow, traditional fats that your grandmother and your grandmother's grandmother used to use all the time, before these manufactured -- what are called "franken fats" -- became ubiquitous and in pretty much every packaged food that you could possibly buy.

Well, we went back to all of those fats, and using them in our own diets, of course, for Jackson as well as for ourselves. And because we had kids, we started about six years ago or so, frying potato chips in real fat. So we've used duck lard, we've used pork lard, coconut oil, of course is a great fat. Well, the easiest one to prepare and use a lot was coconut oil, so we started making them for our other kids and they absolutely loved them.

We started to make enough for picnics in the summer or dinner parties and things, and increasingly, people said, "These are the best potato chips we've ever had." This started around 2006, 2007, or so. "You really should sell these." And we thought, gosh, people are just being nice. They're our friends. We just gave them something free. Of course they're going to say, "It was great. You should sell it."

But they said it for years and years, and about 2011 we thought, gosh, a lot of people are saying this. Coconut as an ingredient in foods, whether its coconut water or coconut meal in sports bars or whatever, started to become this trendy thing. I wonder what it would take, actually, to actually put these in a bag and determine if our friends were just being nice, or if, in fact, they were being genuine when they said we should sell them.

So we went through that process. I should say my wife went through this process. I was merely her cheap labor on the weekends. But she went through this process and eventually got them in a bag, sold them to a couple of local health food stores, and they flew off the shelves. People couldn't get enough. She opened up the website for ordering in September of 2012, and in the first few months she got orders from 40 US states, eight different countries.

That, to me, was the point where I thought, gosh, she could really do something with this, simply because the potato chip is the most ubiquitous snack food on the planet. I would guess that 80% of the entire world's population is not greater than a mile away from a bag of potato chips that they could purchase themselves, given how far-flung they are across the world. But that people were ordering them from Australia and New Zealand and Belgium and England and all these other countries --

TH: And you recently had a cameo at the Academy Awards, I understand.

SR: Yeah, so that built into this idea. We had a friend who's in the entertainment business in LA, which is to say the product placement business in LA. She was very nice. Took [my wife] Megan under her wing and said, "This is a great story. I'd love to help." And she, in effect, submitted the product to the Academy Awards, which have this product selection committee, in effect. You can't pay to have your products placed inside the green rooms or the dressing rooms back stage or what have you, but the Academy actually determines what products they place there based on some brands that they want to be associated with, the quality of the product, the interestingness of the story, etc. She had heard this past Wednesday that they were chosen to be in the green rooms, in the dressing rooms, the executive suites and the production areas. So she was incredibly excited, obviously. And it's a real example of not only serendipity, because she obviously didn't expect it and wasn't banking on it at all, but that there was also a "lemons into lemonade" kind of thing here. That diet helped save Jackson's life. It appears as if there's some demand in the world for healthy fats, and she just happened to offer the right product at the right time.

So it's really this incredible synergy between a great story, Jackson's story; an interesting trend insofar as people are becoming much more aware and educated about what healthy fats are versus unhealthy fats; and things like the Academy Awards selection. It's been an incredibly fun thing for her. And really as much as it's been a ton of work for her, I think, as I look at it from an observational standpoint as a husband and a father, I think it's been incredibly healing, too, to turn lemons into lemonade and share Jackson's story with other mothers and other folks who have their own challenges in life. Whether they're serious or semi-serious, everyone faces certain challenges.

It's been really cathartic for her, I think, to go through this process. And obviously, it's been great to have positive feedback, but also just to turn the story into something incredibly positive is a basic and fundamental human need.

TH: How tremendous it must have been for your entire family. To champion this mission must have been extremely cathartic. And just as a friend, knowing you for this long, and having been through many challenges with you, and to see this blessed outcome come from such a hardship is really, truly inspirational. I'm a sucker for an inspirational story to begin with, but this is pretty remarkable by any stretch.

So what's next? What do you foresee? Have you faced any growing pains? Have there been any lessons for the entrepreneurs out there who have a dream or are coming out of the gates with their mission? Anything on the food chain, so to speak, any lessons learned along the way that you might be able to share?

SR: As I think about it and have watched her build this, what's changed is a result of the interconnectedness of the world, and this is sort of typified by the fact that she received orders from eight different foreign countries in the first two months. The interconnectedness of the world is a fundamental shift in how you build a business now, I think. A corporation like Lays (NYSE:PEP), which has 75% margin share in potato chips, for instance -- in the US it's a $9 billion business per year. A corporation like Lays couldn't start today without engaging people at some human level, and do so through either social media or other online methods.

But the reality is, some nameless, faceless corporation, particularly in the consumer packaged goods or even the services space, is unlikely to do really, really well and get that increasing returns/positive feedback loop going of good reviews begetting better reviews. You can't really get that in a modern day if you're just this nameless, faceless corporation without a mission, really... that you're just out there for ROI.

You've spoken about this for a decade, Todd. That there has to be a mix of the financial and the human. I see, as I watch her build the business, how critical having a connection with an actual human being is. Corporations are not human beings, and neither is that the case in business where you can start a company and hope to do well without having some passion, some driving story or some driving mission. And she's got that in spades.

TH: I agree with you, a good story goes a long way. But it has to take more than that, right? To have a great story will maybe open a door, but to have a great product will keep the door open.

SR: True.

TH: For those unfamiliar, Scott has been one of the more astute analysts for a long time; he is a multi-linear thinker and a very shrewd market practitioner. In an age where some people think the louder you scream, the more important your message, Scott has always been a "strain your neck so you could hear what he has to say" kind of guy.

Unlike standard potato chips, Jackson's Honest Chips are fried in coconut oil and taste like actual potatoes.
A handful of people have already reached out to me through social media after I shared the link to Jackson's Honest Chips. There was just almost a collective sigh of relief, a genuine happiness to hear the resolution, or at least a continuation of the spirit surrounding the story of Jackson, because he was someone who we were all drawn to in the early days, when he was first diagnosed or first realized there was something amiss.

My question for you, though, because there are a lot of folks who remember you as Scott Reamer, the financial market seer. You've always been extremely talented in that regard, and I don't want it to stray from the focus here, which is Jackson's Honest Potato Chips and the story that surrounds it. But while I have you, in two minutes or less, can you give your view of the world and where we are? I know it's a very complex question, but what are you seeing that could maybe help some Minyanville readers make sense of what's going on in the world?

SR: I'm focused on building quantitative strategies to monetize volatility, and there are a bunch of ways to do that now, not the least of which is the futures and the ETFs and such, both here and in Europe. But suffice it to say that when we originally made the big picture call in 2006, 2007, even in 2005, you recall that they were saying, "Gosh, we're going to enter a period of pretty extreme volatility, both up and down. And both sides of the distribution curve are going to get a lot of work, both far sides."

Now there are a bunch of books to describe some of the qualitative mechanics of that, but at the end of the day, what we're living through is an extraordinarily volatile time, and the net message is: This is going to continue. Whether it's a specific geography or an asset class will depend on the mechanics of those particular places and those particular assets. But the overarching theme of increased volatility has not gone away at all, even if we have long periods like the last two years of a pretty highly damped volatility. What we're getting from the monetary and fiscal policy experts is an attempt to control volatility. And every attempt by one or more entities to control something that's as natural as volatility only results in more of it.

So the net message is greater volatility in all sorts of asset classes. Probably less consilient volatility, in the form that we saw in 2008 and 2009, where everything went up or everything went down. I think what you're going to see over the next several years is pockets of volatility in certain asset classes, certain geographies. So a breaking apart of the volatility wave that we saw start in 2000, come back in 2008. We're going to see more of that, but it's going to be a little bit more diffused in time and through geographies and asset classes.

So bracing for that volatility, attempting to step out of its way, or to try to monetize it if you're able to do that, that's the biggest continuing lesson from 2000, from 2008, the boom/bust cycles that we've seen, is that they're not over. And that those are going to become more challenging to deal with, because they're not as easy to see as they were in 2007, because everything was going up. And everything then subsequently went down, as it were, so you had these waves of volatility that were very broad and consilient. Now we're seeing, and we will see, in my view, different pockets of volatility express themselves in different ways. That's going to be a challenge, an almost bigger challenge than 2008 and 2009, for sure.

But nevertheless, that's the one thing I can point to as being a sort of a high confident statement, is that the volatility will continue. And dealing with that, as you've said many times, just surviving is the most important part, and monetizing it is the cherry on top if it's possible.

TH: Excellent. As we tie up here, I'll just ask you to think back for the moment on the last decade plus. When we look at everything we've witnessed in the global markets, whether it was the bubbles and busts in various asset classes, and/or your personal experiences, if you could synthesize and really drill down and say, what was the one thing that if you had the benefit of hindsight 10 years ago, that you've learned, given your experiences, personally and professionally, what would that sound like? What would that feel like? What would that look like? If you had to kind of synthesize and sum up your experience over the last 10 years, what have you learned?

SR: That actually is remarkably easy to answer, and that is, don't ever, ever give up. Whether it's your portfolio, whether it's your business, Minyanville today exists because you never gave up. You didn't give up over a lot of reasons, but you didn't give up. You didn't give up because you're passionate about it, because you're surrounded by great people, great friends. But at the end of the day, whether it's your marriage or your kids or your diet or your workout regimen or your portfolio, your methodologies that you use, just don't give up. And if anything is valuable from what I've gone through, personally and professionally, I'd say that would be the number-one thing that I would tell people.

TH: Well, I thank you, both for your time and for setting an example through your words and actions, Scott. You're a good man. I understand there's no such thing as a victory lap when you're in the midst of a race, be it metaphorical or otherwise, but you give us a lot to think about, and you provide an example of how we can make ourselves better, and for that I thank you for your time. Please give my love and the love of the Minyanville community to your beautiful family.

SR: I appreciate that. It was entirely my pleasure, Todd.

TH: Thank you, sir.

SR: Thank you.

Twitter: @todd_harrison

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