46: Carson Block: One of the World’s Most Famous Short Sellers. Founder and CIO of Muddy Waters.

Money Maze Podcast

Business, Investing, Management, News, Business News

4.8 • 216 Ratings

🗓️ 16 September 2021

⏱️ 64 minutes

🔗️ Recording | iTunes | RSS

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Summary

If you were told that abnormally low interest rates and quantitative easing would provide huge tailwinds for higher equity prices, then it isn’t obvious you would chose to run a fund whose activity was entirely focused on short-selling.

However in today’s episode, Carson Block, Founder & CIO of Muddy Waters Research, describes his early exposure to fraudulent listed companies in the US, before intrigue and law took him to Asia. There he started on a path to discover and unmask some extraordinarily high profile corporate frauds. Detailed research, site-visits, scepticism about management claims and forensic analysis all featured on his journey which resulted in collapsing stock prices and humiliated investors.

Eight of the companies he has exposed as frauds have been delisted from stock exchanges. Two others settled charges with regulators, with Sino-Forest being one of the high profile casualties. Carson describes his approach to identifying potential malpractice, the investment process and explains his willingness to take on large corporations. He shows why he clearly isn’t interested in winning popularity contests

He describes his investment criteria, the paramount importance of risk management, his motivations, dealing with the criticisms and hostility he has faced, his firm's ambitions and the characteristics needed to succeed in this space.

Finally he comments on SPACs, Tesla, the challenges of shorting in a world of negative real rates and why he believes China will lose out to countries like Vietnam (where he prefers to make his long bets).

Transcript

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