 Like what advice would you recommend to like other short sellers who like read the report? Like would you say like they should just go short right away? Like if they read your report or they shouldn't go off your report at all Because like when you release them like sometimes he stops tank, right? So Would you recommend someone just slam the bid after they reach your report or her? Yeah, everyone watching could just slam the bid whenever All day long for the next couple days That would be great for me What's going on everybody we're here with a very special episode of the after-hours podcast today, we have some Who works with Kerasdale capital Kerasdale capitals and investment management firm? And specifically focused on I believe short activism So we're really excited to have you on in and thank you so much for taking the time cool Thanks for having me of course of course So I want to start off with a very basic question something we always ask but how did you get yourself involved in? markets equities and all that stuff I Used to want to be a journalist. So I During college I worked for my college paper and then I got a summer job at a newspaper up in Canada the National Post So for the business section up there. That was after junior year after senior year. I then got a job at the Globe and Mail and You know, I wanted to write for the business sections because I thought it would be Interesting and became an economics major was sort of interesting that but I mainly want to be a journalist and then I read The Warren Buffett biography by Roger Lohenstein and they're ready to invest or so, you know, I thought to myself Hey, if this journalism thing doesn't work out Investing doesn't seem too hard. So the journalism thing didn't work out I moved down to New York got a massive banking job and then Went to a hedge fund and then started my fund That's really cool. Did you have like ever any dreams of like I don't say day trading or like actually Trading the stocks intraday and all that stuff or was it always the idea of I want to be a long-term investor Slow and steady like Ben Graham says Yeah, long-term investor. That's very cool. Very cool. And then how how will do you when you started at Carisdale? I launched Carisale when I was 29 That's really cool. So How'd you take that step from? Working at a hedge fund to now starting your own thing Like was that jump like super super difficult or was that jump kind of like a bit easier for you? So my fund at the time wasn't you know, it was a distressed fund and they had part of their assets in less liquid assets in 2009 So they weren't doing that great and you know, the real options were Switching to another fund or starting my own thing in 2009 and I just felt that You know, why not go for it? Job market wasn't super hot early 2009 and so, you know, I thought to myself let me You know launch the fund start building a track record and if it doesn't work out after two or three years I could You know go back work for another fund, but You know in the end I worked out so You know, I think when you're younger, there's less You know, it's less risky. You have less to lose right if it doesn't work out Whatever you go get another job and I've seen a number of funds Just start out when when the manager is very young with very little assets and You know, they've grown nicely. So I think it's doable How how when you when you when you went from the hedge fund you launched carousel? what What guided you into selecting these companies that you decide to research and Especially the ones that you consider overvalued. Sure. So Initially, I mean I launched with three hundred thousand dollars. So very little money And I thought to myself well, you know, one of the ways I can get my name out there is by writing Reports on some of the stocks that I owned Or just you know providing this research for free, you know, Twitter wasn't really a thing then seeking alpha Didn't really have the sort of sophisticated articles. It has now there wasn't this concept of sharing ideas on the internet Hedge funds doing so wasn't really a thing now it is, you know Substack is replacing a lot of sell side research just in terms of quality of contact short activists are You know very present in the marketplace people sharing ideas all the time the idea sharing websites are You know great ways to source ideas this stuff didn't really exist back in 2009 and so You know, my idea was to start this email list share the research more broadly and get my name out there And so I started doing that in 2009 when I launched and then One of the areas I started looking at were these Initially, it was SPACs that were buying Chinese companies. And so that was sort of my first introduction to I Their misaligned incentives for SPAC sponsors Because basically SPACs were acquiring Chinese companies at like two times PE, but there was no company. There were fake companies and so You know, you'd think to yourself. Well, why would a seller sell his company at two times PE? Well, if he was making all the numbers up So the one times P is like it's right, right? And so So I started looking at these SPACs and After about six to eight months of researching I realized there was a lot of fraud But they were making up their numbers so you couldn't just sort of short the stocks you had to actively expose them So I began exposing them and you know a lot of modern days not a short activism developed out of that You know before People exposed the Chinese companies. It was just Andrew left of Citron research with his blog Money Waters came out with the first ever real full-length report in April 2010 on Orient paper I wrote on a company China American food under a pseudonym like Chinese company analyst on Seeking Alpha and Then I sort of came out with the cares I did everything under care still in November of that year Citron came out with something on China biotics a month later and you know short actors really developed out of that So it wasn't originally I wasn't intending to share research on shorts But once I figured out that all these companies were just making up their numbers You know there's a great way to to to generate some P&L And so you know I started using the research and sort of the platform on the short side And then investors came you know came to us and said hey You know this is pretty interesting and they started giving us capital for short activism So I became a short activist, but it wasn't really the intention when I launched the fund I wanted to just go long stocks like or Damn that is actually crazy you're kind of like a like a pioneer for this type of stuff You know like like you are just kind of like It just kind of like happened but like you're kind of one of the first people like once the internet like was really happening that like You know that were like that were like out like doing this activism, you know So when you kind of like launch a report, how would you? Like what advice would you recommend to like other short sellers who like to read their report? Like would you say like they should just go short right away like if they read your report or they shouldn't go off your report at all? Because like when you release them like sometimes these stocks tank, right? So Would you recommend someone just slam the bid after they reach your report or her? Yes, everyone watching could just slam the bid whenever we're gonna All day long for the next couple days Now we'd be great for me My recommendation to all of your listeners You know, so we've done probably a hundred campaigns hundred shorts, you know, I have a lot of experience in this We've gotten things wrong other people get things wrong You know, we try to take pains to do very high quality research I think one of the things that carry stale is look we can control whether these stocks go up or down or what happens What's happening with the market? You know It's like you release a research. You hope you create a dialogue people care, but sometimes they don't sometimes You know mean stocks are in favor and the market is rallying But at the end of the day we try to do very high quality research We can control the research. We can't necessarily control what's happening in the market and you know, I think Hey, I think we've gotten better over the years in terms of the quality of our research Um, and then be, you know, I think we're seeing we've been seeing a lot of success over the past couple years um, and it's a function of The marketplace recognizing the care stale does do high quality research And I think as long as that's the case. We'll hopefully get a lot of things right, but we don't and you know As practitioners or short activism, we know that you know, people get things wrong and so We look at opportunities where other short activists have published a report, but they're wrong Those can be great opportunities on the long side. Um, so Uh, I don't know if I have a recommendation, but people should just read the research You know, see if they they agree with it and it's an attractive short then it's an attractive short Um, and if they do slam the bid You know, if they decide to just slam the bid About it One thing that was kind of spread all over twitter was after you released and I don't know if you can talk about this or not And if you can't that's fine, but one thing was that that uh, like lawsuit that you got hit with after you released the the ai short report um Was that was because I just read it on twitter was that like real at all Like was that like a real like actual like lawsuit that you guys got hit with? Yeah, we're we're in the middle of it now. We have um You know, I think it's a frivolous lawsuit Um, it was actually a lawsuit filed against the letter we wrote, you know the six page letter So you can read that six page letter yourself and um, you know come to your own conclusion on Whether we'd be liable for anything under this letter that we sent to deloie You know Pointing out issues we see with the company's accounting and then encouraging them to take their audits seriously I don't know where the liability and in such a letter You know, so I think it's a frivolous lawsuit. Um, but we have you know, we're going through the court process And we follow the motions and I think uh, right now it's a bit of a waiting game. Um, the the ball is in the judges court Um And you know, they'll review it some of these systems are slow, but Yeah, it was real and I I've never seen a class action lawsuit against a short activist me either Me either That's why I thought it was made up. I thought that it was like completely made up So then when I saw you at that well when I heard that we could have you on I was like, damn I gotta ask about this Yeah, you know when I saw it too, I hadn't been served yet. So I'm like This is no So as as a trader or investor, like we know that Using confidence and having confidence in your own ideas is so important When you get hit with like negative reaction from the companies that you're you're suing or people that are companies that you're shorting or Investors in that company that are that are upset You know, does that ever is that hard for you to then maintain the course and like get like keep going on your idea? Or do you ever get like stressed out or frustrated by the reaction you receive? I don't think so. I Yeah, I've just been doing this for a long time and It's been a lot of negative comments me Personally about my fund, you know, so I think we get a lot of angry voicemails emails I've gotten your facebook messages about facebook dms From upset investors. So, you know, I've pretty much seen it all. I don't know if it really You know impacts my conviction, but we just on the fundamentals You know, we're we're interested in hearing what what others have to say and You know, a lot of people just like call me names, but uh, people who post on twitter, you know genuine counter-arguments Um, you know, we look at those and Um, you know, if we if we if it changed our mind will we usually don't sort of like You know, right about how it impacts our thinking. We just sort of left the original report to sort of stand on some Um, but you know, we can close the position out if if we feel that we're wrong But that happens very rarely. Um, you know, I think most of the time when we get trades wrong It's because of stuff that happens with the market, you know, like carvana for instance, that's not carvana and ai I think those stocks ultimately doubled a month or two after publication At this point, I think um ai has retraced all the way back down, but come on on its way down. Um But you know, I think we're right about our original thesis. Uh, But um, you know, we'll look at what people have to say And and sometimes respond to it be usually just sort of like use it To sharpen our own thinking on the stock and our did you guys take a loss on ai and carvana? Or was it more like breakeven or did you guys like cover right away or like how did that work? ai was profitable carvana was lost when you target these stocks as a potential short selling position like i'm gonna I'm considering a short on this what is One or several of the things that actually puts that stock on your in your radar puts it in your sites What exactly do you see in the beginning that makes you go hold the phone folks? You know, so the fundamentals are important. Um, and so we want to come up with ideas where we're right about the short Um to the extent we can find ideas where we don't think the company is going to be around six or seven years from now You know their terminal zeros Those can be a little bit more interesting than just valuation shorts although we've published on valuation shorts in the past Um, and then we want to we want to have a discussion on the marketplace. So there are some ideas that Where the thesis can be a little bit too complex where we've started moving away from those types of names So we used to write a decent amount in biotech and health care Uh, if you look at our reports in 2017 1819, you know, we would publish on some of these stocks and I think by and large We got the arguments right on the vast majority of them but Sometimes the arguments were so complicated that it was hard to change The market's opinion change sell size opinion. Um, and so, you know, we've stopped doing things in health care Just the arguments are too complex. Um And so we've gravitated towards names where You know, we think that if we share our research, um, you know, it'll They'll be talk. They'll be discussion. Um as a result of it and and people will engage with our reports And and we can impact what people's thinking around these stocks are Yeah, I know I know a while back citron. I had mentioned that they were going to stop. I think publishing They're short letters and especially online because they just didn't want to deal I think a lot with the retail, uh, like Attacks and everything that came after that, you know, how do you see the future of short selling? Especially with this giant increase in in retail trading and you know, Become very popular to trade stocks and try to squeeze folks So how do you see the future of this kind of this game for you? You know, I think the market continues to be a healthy for short activists You know, we published on tillray a couple weeks ago I think we were able to trigger debate on that on that stock And you know, we've seen good engagement on most of our reports over the past year You know, I think other short activists are experiencing sort of similar trends it depends on the quality of the activists work and You know, there's there's a range there. There are some short access to do better work than others You know, we try to do we try to be You know in the top tier there And I think for the top tier providers, they're having a lot of success. I mean look at hindenburg this year, right? I mean Carl icon Giant company in india He's getting plenty of traction with his ideas. So I don't know if short activism Is doing too bad right now Um So So far it's promising Yeah, um, I'm sure that you follow kind of like the gme amc wall street bet situation Um, if there's any apes listening, uh, what would you what would you say? I mean, I don't think the idea of like trying to gang up and squeeze short activists really works Um We've had we've had situations because we monitor twitter and the reddit boards. We've had situations where You know, redditors have gotten together and said, you know, like like over the weekend like this monday Let's all show up and squeeze carousel And monday shows up and like socks down four percent like it just doesn't really work Tell a whole bunch of your buddies like let's go buy a stock This is a sport actor You know short squeezes are definitely a thing they occur on a regular basis But who knows like what caused them? There's like things in the market in the market structure on that day That causes these squeezes It's not like a bunch of people getting together and like deciding to squeeze someone like I remember the, um the, uh Twitter spaces that You know codes and others used to organize on amc like trying to engineer squeezes Whenever they do it like the stock go down So will you be a uh, uh, uh, will you actually go watch dumb money or have you seen it already? Uh, what's that? Is that it? Is that a? No, I was like any documentary it's It's more of a Dramatization of the actual event where you know everybody is represented by a an actor and you know There's big people like seth rogan who plays one of the fund managers and stuff like that and so, uh We have a we have a friend of a friend that was uh familiar with uh with roaring kitty and Uh and he said it was actually pretty accurate to what happened on their side of things from what they understand And so Yeah, it'd be interesting speaking of amc and gme. I just wanted to know. Yeah, I'll definitely watch it When's it when's it coming out? It's out right now. It just came out. Yeah, it just came out like last week or something like that Yeah, I will yeah So of these stocks that you're looking at for one most One that's most familiar to me is pl tr and Of those particular stocks, you know, we're most of our audience is day traders. These are people that are in and out and Don't really pay a lot of attention to the fundamentals, but they can get really Sucked into it and that can bias their decisions on Whatever their whatever trade they're trying to make Is there any particular red flags or telltale signs that you would tell a day trader? This is something you should really pay attention to on a particular stock before you start getting Uh a bias position whether it be long or short. Well, so we're very fundamentally focused At the end of the day, you know every company's with the present value this future discounting cash flows and we go long stocks that You know where the market price is is below What you know DCF would spit out and we're short where the stocks are You know like a capture enterprise values are higher than What the DCS would spit out? See my only like real contribution to trading and thinking trading about around trading is just You know try to find what consensus thinking is what's crowded And If you can take the other side of that Or if you're sort of joining the crowd, you know Think very carefully about whether you agree with the fundamentals. So my you know All I can tell anyone on trading is just You know don't get sucked into What the crowd is thinking yeah one of my favorite tools that i've talked about here before is the um I don't remember what what it was rob robin robin tracker. Was that it? Yeah, it was like uh, it was a popular tool It was one of my favorite and this was back, you know in the hype of you know when tesla in 2018 Was running to a thousand for the first time Man, you could hop on robin robin tracker And just whatever whatever ticker reached the number one number two position Let it sit there for a day or two and Dude, it would inevitably crash hardcore And that kind of plays off of that crowd hype Uh mentality that once everybody kind of joins that it dies off right once the hype is dead It dies really hard. Are there any specific tools or resources that you use today that kind of assistant finding that crowd hype? Um, nothing too sophisticated. Uh, you know, I just sort of track What People are saying on twitter where people are saying a reddit and then you know the hedge fund community where people are talking about in In sort of the hedge fund world. So Occasionally you get these ideas where a bunch of hedge funds start talking about it They get presented out at idea dinners And you know, we just keep hearing about it from like other managers or the professional investors Because there's the idea sharing websites, you know value investors club and some zero you see ideas You know get pasted get posted three or four times in a two or three year period You know, those are the crowded names and if you come up with an idea That's not getting posted on the idea sharing websites. No one's talking about the idea dinners Um, you know, you don't see a whole bunch of people pitching it and telling you to look at it. Um, You know, that's just probably not crowded If you don't see a bunch of hedge funds from the holders list And then if you don't see it anywhere on twitter, if you don't see it anywhere on reddit, you know, those are uncrowded names and You know, I find Those are my favorite opportunities Um, ultimately the fundamentals are what matter again. So I'm not a trader. So No, it's really applicable to your view to your listeners But um, but when I agree with the fundamentals and no one else is talking about it And it's not crowded, you know, I find those to be My favorite trades my favorite investments Um, and then there are times where I like the fundamentals of the story Um, and I'll even if it's crowded and a bunch of people are talking about it, you know all by the stock and You know, I'll just like deal with the volatility and regret my decision at some point usually They're also linked right if if everyone's talking about a stock And posting on it and yeah, you go to value investors club and they're they're you know There are four or five posts in the past couple years like usually it's not the best stock, you know, if you do your sort of genuine fundamental analysis unbiased objective Analysis into the stock you'll come away You know less optimistic typically because if everyone is talking about it Then you know the story is out there if it's such an attractive stock the price would probably reflect it Whereas stocks that nobody is talking about um, you know, I think that's where you can find real opportunities And then You know for us, we have a platform. So if we really like something we're at a report send it out there Um, and and hope that discussion revalues it higher on the long side and then we call them the the unknowns that are just hanging out there that you know The best opportunity is right there the best opportunity is not always the hot chick. It's not always the most talked about stock Hey, it's the it's hard to do original work But if if anyone's out there doing it, you know, that's sort of the best way to make money Yeah, I had a question on risk now. Have you ever been stopped out of a short? um And then ultimately been proven wrong and kind of missed the move that that later came or have you Have you never really had to deal with that yourself? Oh all the time Yeah, I mean if you like if you stick to your guns on shorting Is that fun? You'll be out of business as a trader. You'll lose all your money You know shorting is not anywhere. It's not the place. You want to be a hero? Correct. Um, you'll get your face ripped off. Yes all the time 14 years of doing this You're a thick skin. I can't even I can't even You know a list of the number of times I've been stopped out and then like been right about the thesis I find we're typically right about the thesis, but Uh, that doesn't necessarily mean the trades are profitable. Yeah, I have as a fund manager How do you determine risk on on certain trades like that? Are you like do you have an a is it like an a plus set up to you? Right like that kind of idea or is it like, you know each different time you attack a company You're going to increase your risk depending on your how certain you are that it's going to go down kind of thing How do you determine that? Yeah Um, yeah, so some ideas, you know, we like better some ideas You know, we believe in the fundamentals, but from a risk management standpoint You know, you make those positions smaller Um There's a lot that goes into it. You know the quality of the idea Um, the market environment, you know April 2021 you're probably sizing things differently than um You know middle of 22 for instance, um, I remember Hindenburg came out with a report back then I think it was like February 21 and he like came out with a report and he's like we don't have a position The Market environment definitely impacted his position sizing there and that he had no position Like had the report then so he came out with a report. Um Well, all this work went into this research, so I guess I'm just gonna put it out there, but I'm not And I think that was within weeks where citron Announced that he was no longer shorting And that was like the top of the market, you know, yep Destroyed over the next 18 months Refugees like it's obvious But um, yeah, you know, so mark environment will impact our position sizing. Yeah, there's a there's a lot You know, we've we've just done this a lot over for many years. Um, and so You know, I think we have a sophisticated perspective on how to go about the strategy Absolutely That's uh, that's super cool. Um Recently like about in the past six months. We had this sector where there were tons of like china junk stocks Just going like to the moon um Did those ever hit your radar to maybe do some like activism on or maybe you did some I think all of those are just too small for us You know, we want at least like 10 15 million dollars 80 v and and and borrow available and I think a lot of those like China was like, I don't know. I don't know what that stuff is right like who's doing it and treating it like we watch it. Um, but It's it's just too like a lot of that stuff's just too small for us to trade so Our focus isn't there versus Stocks where we can build sort of more meaningful positions and get borrow and stuff Yeah, and uh, also recently you uh, did the whole short report on tillray Maybe you could kind of explain How you went about that process to our viewers? Yeah, so, you know, we like stocks that are on shorts where management is constantly diluting shareholders and um You know, I think on the short side We like situations where you know, the crowd Is has gone into the stock and sort of, you know, the long long side gets crowded but the thesis is wrong and so What's happened what happened with the marijuana stocks is that the legislation the progress on legislation in the us Um, is good for most weed stocks like the msos But it doesn't it doesn't really help the canadian licensed producers and yet they participated in the rally partly because You know, they've been heavily shorted and the stocks have done so badly and um, and so You know tillray benefited from that so it was up a lot on the marijuana news, but really wasn't benefiting from the legislation um, and then You know, those canadian players are just continued just to be in a world of hurt because they're they're really competing with you know Individual private farmers and much smaller companies and it's an over saturated market Supply and demand is not in their favor. They're not generating profit tillray has been trying to diversify Into other lines of business. They bought and has a bush craft craft beer business We think that that acquisition doesn't make a whole lot of sense and won't be successful and Will go better than beer and weed Yeah If it was I think just for them You know that craft craft beer is it's a very local market, you know, so acquiring all these sort of like craft beer brands that in has a bush wants to get rid of It's probably not gonna be very successful seems kind of like a Just a guilty pleasure of someone in On the board or in very far upper management You know what I want a craft brewery Yeah, we talk about this in the report, but I think you know the CEO or urban simon has a prior track record, you know, he sort of When hain and the stock went up a lot and then it went down a lot and We have this sense that he just likes to acquire things and like make deals, but like The whole thing doesn't really make a whole lot much sense and hain Um, was a good example of that where he was just acquiring a bunch of stuff, but Um, you know, those acquisitions didn't play out Um as originally anticipated and the stock has done pretty badly hain's done pretty badly And he's sort of doing the same thing with torii in our opinion and and um You know, I think when you acquire stuff you have to have Um, you know a sound basis for doing so and it should be a creative I'm not really sure that's what he goes for his track record. I'm not really Um, so you mentioned these these these particular CEOs that kind of have a Have a habit of going off of the rails Is there kind of like a a little list like a black list of if these particular CEOs Take take a role in a company. You immediately target that company as a potential short later on Are you following any of these people? Um In what they do professionally. No, there are there are actually some that we do follow. Yeah habitual offenders Yeah Yeah, I find I don't know if it's like our it's not like our number one screening tool. Um, you know, we have a team, right? So, um You know some of the investment professionals Probably use that as more of a sourcing tool than others Uh For the most part You know our team's pretty experienced and so I let them source ideas, you know, how they think is best Um versus sort of super posing some process on on what they do. Um, and and I'm sure Um, you know, they do look at the players, but We like situations where, you know, the stock has done well and people have crowded into a name and we can publish on it And so sometimes we're reacting to things that have gone parabolic Um areas of the market that have gotten hyped up and then we do research on it and we say, oh Well, there's that there's that ceo that we saw before or that um You know pipe fund and their capital structure or whatever the case may be, you know, whatever sort of Some of these players that we've seen before and and we like to take the other side of I remember when we were doing the chinese fraud trade there was one fund that if they were Invested, you know, we sort of for a while for a couple months. We just went after all the names in there And Now one of the analysts from them like we're really good friends, but They thought that the companies were were real Um, and then as the short activism came out, you know, they sort of realized that they weren't real And so then they started shorting the stocks themselves I mean as day traders that's a side of fundamentals that we can really appreciate is There are those particular funds that just have a tendency to do that really toxic financing and you know If they're involved, there's some shiesty business going on and They're going to offer it some ridiculous price based on these warrants or this or that or anything And you mentioned pipes as well. There's There's um, there's a twitter guy aspects research That is he wrote this huge back in the day of when twit longer was a thing He wrote this huge thing about, uh The the habitual offenders on the pipe on the pipe list and uh, I think that's one that day traders can really appreciate is Yeah, we um, we actually wrote a report on a ffie fair day future Oh, cool And we had the report and we're sort of sitting on it and you know, we started seeing these pipe funds in there and I'm like You know what? We won't issue the report. It's like I don't want this trade to be crowded This is just gonna be the gift that keeps on giving so we're just short of the talk going down and then Like every time it would pop. I'm like, should we come up with a report? I'm like, no like short Bar costs is still below temperatures. I was just like short Short more and I didn't make that choice sort of like actually didn't put out the report because it's sort of like Rather than getting the name credit because part of the problem with our reports is, you know We get some of these names crowded. I mean the look at what happened with AI etc You know, like is part of that squeeze because carousel came out with the report, right? um, and so The case can be made In that situation where now you have that knowledge. Are there any situations where you are? Uh in terms of like protecting risk profiles and things like that. Are there strategies that you've put in place? that you know when you put this short report out you need to put it out but The the herbs of the retail world are probably gonna try to run this up Do you do anything as a fund to protect against that and maybe hedge that position? Yeah, so I don't I actually was saying I think that it's it's I think one of the impacts of the increased participation by retail In the stock market is actually there's a lot more people shorting stocks, right? You sort of don't talk about you talk about you you hear about the apes and you know people buying AMC and Robin Hood, but as retail has got like most Most investors aren't like buying AMC stock on the long side You know like some of them talk about it and they put out eight means but like Most people don't want to lose money in the market, right? They want to make money in the markets You're like clear to have your sort of typical retail investor actually be short AMC then be long AMC People don't really talk about this, but like it's sort of intuitive, right? Like AMC is It's been a short for a long time, you know like the lever and these these uh movie theaters aren't gonna Generate enough cash flow to cover their debt, right? And so you sort of do you know, they get heavily shorted and people think it's just hedge funds shorting the stock I'm not sure that's true. I think it's a lot of retail shorting these stocks. These names they get crowded They don't like harmonic gets crowded or AMC gets crowded. I think it's a lot of retail shorting the stocks That's making uh, that's making it a crowded short Causing those high short interest then causing those squeeze and is it funds that are just trying to make a market That see that kind of that aggressive shorting, you know, because most of them they're not trying to add liquidity They're just whacking a bid or they're just going in at the market. Do you think that that is Something that's that's guiding it to be pushed up just based on the fact that Market makers are trying to keep liquidity in that base and it's not physical people probably inside an algorithm or something like that Yeah, I think there is some of that going on and then just when you're looking at the market and then just when a lot of people are short of stock and You know, they all go to cover because the Nasdaq's up 2%, you know, it's going to squeeze, right? So You know again, like what are the crowded trades and you know, do you want to be there trying to take the other side? I think You know on some of these some of these shorts there's not that many people you know There's a lot more people short them or you know, then Then we think I'm not really sounding very intelligent We never do here, so it's okay. Yeah The bar is real low here Shorts are just going to squeeze because all these shorts are going to cover when it's so obvious that the stock is a short All right. I think that's when you see squeezes and then yeah, there are probably quant funds um that prey on that and and extend the squeezes and there's stuff going on in the derivatives market um But you know, I'm not an expert on market structure. That's that's pretty complicated You mentioned kind of that you mentioned about citron and you mentioned about hindenburg and you mentioned about some other hedge funds and stuff like that Do you ever talk to like citron or hindenburg or do you ever like talk to a hedge fund and say I'm going to put this report out Are you guys just all independent and you don't want to share any information at all? I think everyone's pretty independent we don't We don't talk to them and share our research with them. We don't want other people short on names um, you know to the extent You know if other people know about our reports and they short the stock then when they cover um, that can cause issues so We do our own thing um And don't really work with others and I think It's the case with with most people. I mean Uh, but I don't know. I mean there are I think there are also short activists to do more collaboration There's guys out there that provide capital to Some of these anonymous short activists or some of these smaller players that don't necessarily have a fund You know, there's folks that they give them capital and You know, we just don't That world doesn't make a whole lot. You we don't really participate in in in in that world because we have our own capital We have our own brand name. Um, so we just sort of do our own work and build our own positions and share our research and it's a lot cleaner But it also just makes sense For us, I also like just for me. I just think we do better research than the vast majority of the short activists So we don't need other people's research. We don't need other people's brands, you know If we have a good idea I'd rather have carousel share the research and rely on our credibility and do things the way we you know, we've learned to do things versus You know work with or rely on People who are less skilled at the strategy than I think Um, I am and we are so we just sort of do everything ourselves But I do talk to them, you know, I I I think angel is a Legend in this business. He's been doing this forever. He's very entertaining to talk to He's always got fun things to say. So I love talking to him. He's a great guy. Um, and then I've known Nate and Hindenburg long before, you know, he launched Hindenburg Oh I uh, you know, I know most of these players Especially when we were all exposing chinese frauds and and everybody was little Um and didn't have much capital It was more collaborative back then But then as we got bigger it just sort of didn't make sense for us to Share ideas or talk talk about ideas with anyone else and just do everything ourselves And I think so that's been the case for more than 10 years now What would you say your daily routine is like from right when you wake up to right when you go to bed I know that there's like a lot that kind of like goes into probably a day for you But I think a lot of people would be interested in kind of hearing Um, you know, so we have a list of stocks that we like and uh on the long side and shorts And so, you know, we'll have positions on if you look at our 13 f we're a bit more diversified than other funds Um, and then our watch list is even bigger. And so, um, you know any given day Stuff's happening in the market, you know, some stocks are up or down 15 20 percent and you know Already done the research on those names and and we'll sort of add to those positions throughout the day And so over the course of any day, you know, I'm sort of trading maybe like Five to 15 stocks just based on the price moves. Um, and then you know So that's sort of what the trading looks like And then we're always just trying to do research on new names on interesting situations. And so I'm working with the team Um to make further progress on research on individual names and come up with more stocks that we like or Um, you know build new positions or on the short side You know find more shorts to add to our Basket of shorts that were passively short as well as to come up with names where we can engage in the short activism on So Those are some of the things that you on Where are you, uh, where are you kind of like located? I think I saw like miami. Maybe miami Yeah, new york miami New york miami. Do you like the nightlife in miami? Do you ever go to a party? Chill? um For any investors that's listening Yeah, I mean miami's a fun city. He's like I enjoy a casual coffee at 7 a.m That's pretty much it He'll find me at 5 a.m I had uh, I had a question that this is something that alex always always ask and you know, unfortunately couldn't be here But um outside of trading, um stocks, you know, how do you diversify? You know, you're a personal Well, like do you are you an investor in any other businesses yourself? Do you like real estate anything like that? um It's mainly I mainly uh My my capital is in just sort of like ETFs and then my fund Um, you know, I can't I don't do personal trading outside of the fund. Nobody at the firm can buy individual stocks outside of ETFs If they're employed by the fund and then that applies to myself and um, you know, so I have a lot of capital in the fund and then just to diversify I just I just like buy the spy um or ETFs like I did a little bit of the rsp which is equal weighted the equal weighted spy as opposed to you know, in case like Fang underperforms over the next 10 years, but I'm mainly in ETFs and my fund and then um real estate just just just my residences was I don't really invest in I don't do much sophisticated outside of the fund just because You know, I'm really focused on the fund if the fund does well And generates returns um that's that's Has a lot of impact on On my income and so, you know, all my focus is yeah How do you manage stress with investors and you know just overall markets and how do you pull yourself out of that? You know when you're at home, you know with family and everything is is it easy for you to to kind of separate the two Yeah, with investors, you know, I enjoy that part of the business speaking with investors helping investors understand the story Helping investors just understand the markets, you know, the reality is um, even when it comes to professional investors, um You know, there's a lot that Is countertuitive in this business counterintuitive in the markets and you know to be a good trader to be a good investor um You know, it's a sophisticated enterprise that we're all engaged in and so I feel like I can work with my investors to understand, you know, how I think through things and You know help them think through Their exposures to the equity markets Based on what I know, so You know, I enjoy that process and and working with investors My investors, um and then Uh, just in terms of the markets. Yeah, I mean I get stressed out like everybody else and sometimes The best course of action is just to step away, you know And do what you can to not get caught up in the daily price moves because if you're What I find is if I'm watching every tick on something or if I'm just really focused on You know, how my portfolio is performing or You know, my positions are moving You know, I just get too short-term focused and I get sucked into the market psychology gets sucked into like the current sentiment and You know, that's it usually has negative outcomes, right? You want to try to be able to take a step back and and recognize that How people are thinking about the markets or your stock or Whatever they keep the market environment, you know, that can that can change You know in any day and suddenly you go from really bearish sentiment to really bullish sentiment um the overall market and the sector and a given stock and Ultimately the fundamentals went out, you know In my opinion and so it's important to, you know, be able to take a step back and so When I when I start getting a little stressed, you know, I'll just take a day off, you know Honestly, it it works. I think if you don't take days off and you're sort of doing it five days a week I don't know. I wouldn't be able to do it. Um, I would just start being too short-term And in my thinking yeah, um When you uh, when you first kind of uh, I guess like quote-unquote made it Did you make any like big purchases or anything like that or you just kind of stayed low key? I remember in 2010, um, I Yeah, so I launched with $300,000 like not much um and uh, you know I think it was sort of in the first quarter of 2010 so like a couple quarters in Where I had a picture or maybe it was mid 2010 I called my ad Chinese shorts worked out And so I was in New York And I'm like, you know what this is awesome. I'm gonna go Rent a convertible and go out to the Hamptons, you know, like with the girl I rented a Chrysler seabring A year after like yeah, I got the seabring convertible. What the hearts and like You know went to surf lodge back in 2011 You know long talk And my news in my like seabring weekend weekend rental I Do you have any hobbies so excited trading or is it more just always focused on the market? Um You know, yeah, I don't have too many hobbies. I'm just I've never I don't think I've like developed a skill in the past 20 years I have no new skills You know no, I No, I guess I don't I'm just going to restaurants them. What's your favorite spot? Miami or New York either one Alex and I are big steak guys and so is James. So I mean we love we love all the spots that you know Yeah, it's uh, it's been pretty eventful. Yeah, I did in Miami. Whatever anyone is visiting. I like to take them to I think it's like Los Fuentes the or continue restaurant at at baena I think there's like three good restaurants in Miami like mandolin boy a day and Maybe it's just too right Right new york new york the culinary experience is is a little bit better So I'd say my favorite restaurant in new york I don't know I mean you can go top three. You don't have to come on. She was pretty good. I haven't been there in a while but um, that was good italian um That's all I got. I don't know Stomped you on that one Yeah, we went to uh, james, what was that place that we went to alex and uh, everybody we went to uh The it was like a sushi slash steak house. It was like really pot In the uh, in the in the meat packer district. What I why am I blanking out right now to new place? In new york. Yeah I've only been I've been to lugers with alex and then um Keens I can't remember. Oh, um, oh That it's like, yeah, I don't know. I'm like, oh my god. Anyway, there we go catch There's the steak house that they just opened. It's fantastic. It's the most ridiculously amazing thing I've had in my entire they're actually opening up a catch in my amy. Oh, wow Yeah, they're opening up a catch in um South fifth area. Yeah, so This is gonna be bumping Yeah, we yeah when we went we did the uh, it was basically like the wagyu tour where you know You have the emperor and the black olive and everything like that, you know, I'm a huge foodie man So all we my best friend from high school is an executive chef at a at a place in louisville And so it's just like dude, this is just we taught we start talking food. This could go for another two hours, but Well, uh, saw him anything last any words of wisdom for the day traders of the community watching if any uh In the to you know, maybe let them capitalize on some market inefficiencies that you see Lasting words of wisdom on the short side Don't lose all your money Market need to be rational much Uh much longer Then you can stay solvent, right, right, right here on the short side and the long side, you know Try not to invest in things that can go to zero, right? So watch watch leverage in your holds on holding them alongside um, you know things like customer diversification product diversification If you can find a business that like just can't go down You know it can only go down so much. Um, you can always leg into it as it goes down further and Yeah, those are my two pieces of wisdom You know, I find those to be a little bit better than something that like where you know Part of every business plan doesn't go well, you know, but the stock disappears Yeah, you just keep buying it all the way down and then you know Is it there's a lot more money then you're married? Yeah. Yeah Is there any particular things that that uh that carousels doing right now? in this market environment that Maybe the retail world hasn't really seen Blatantly such as you know, everybody right now is like, oh, that's going to capitulate. We're all dead you know, we're gonna Turn into a bunch of zombies or whatever it is Nanites in the air But uh, is there any particular outlook on the market that that you think People would really need to hear Um, well, I think one of the reasons I've been a successful short seller Um and still in business, you know after 14 years is because I'm not a pessimist Um, you know, I'm an optimist. I think the market goes up and and companies with pricing power and competitive advantages You know, they'll get bigger year after year Um, and you know in this day and age Uh, there's going to be a bid for those companies and those stocks. Um, because Um, as the market gets more efficient, you know, I think you you're just going to see Um, you know potentially less periods of just sort of irrational panic and so So, you know, uh, I think every time you sort of like you see all that news flow about the world ending or this That or the other, um If it triggers, you know, severe price declines and companies you own, you know, I think I think those stocks can be good buys and The dangers of shorting is just sometimes people are really, um all about doom and doom and gloom and just pessimistic on the macro and past pessimistic markets and and you know, they It tends not to work well. Um, if you just sort of Keep that bearish attitude even when you know Stocks become fundamentally attractive, but you know, then there's those stocks where you've got the the guy the pipe guys that are like Polluting shareholders increasing their share count by a factor of 10 every week and those stocks will just keep going to 99 percent every 12 months Uh Yeah, we all know the tickers It's going on good companies and yeah Fantastic, man. Well som, thank you so much. This has been truly enlightening, man It's uh, it's an it's an honor to speak to somebody so experienced in the market and uh, thank you so much Thank you. Thank you for having me Of course, man. Thank you