Bernd Ondruch and Mark Hiley: Tales from the Frontlines of Short Selling

Published on
December 2nd, 2020
Duration
76 minutes

Teddy Vallee on the Dollar, Hard Assets, and the Real Rate Rotation


Bernd Ondruch and Mark Hiley: Tales from the Frontlines of Short Selling

The Interview ·
Featuring Bernd Ondruch and Mark Hiley

Published on: December 2nd, 2020 • Duration: 76 minutes

Bernd Ondruch, founder & CIO of Astellon Capital Partners, welcomes Mark Hiley, veteran short-seller and founder of The Analyst, for a wide-ranging conversation about the subtle and challenging field of short selling. Ondruch and Hiley recount war stories from previous shorts such as Wirecard, Asian Bamboo, and NMC Health, sharing their techniques for spotting red flags ranging from dodgy accounting to non-existent factories. Hiley and Ondruch weigh in on the common challenges short sellers face, such as margin calls, defiant long-only investors, and guileful misrepresentations by management. Lastly, after reflection on the strictures placed on short sellers under the new regulatory regime of Markets in Financial Instruments Directive II (MiFID II), Hiley and Ondruch impart some advice to investors who dare to dabble in this delicate art. Filmed on November 30, 2020. Key learnings: Identify the duration of your trade as some shorts require years to play out. Contrastingly, know when to get out. Be wary of crowded shorts as well as companies who appear to grow a great deal – it is often easier to short the value traps (unless, of course there is truly fraudulent accounting at play). Lastly, field work is incredibly important as that’s one of the last activities that computers can't do themselves.

Comments

Transcript

  • SP
    Sat P.
    22 December 2020 @ 14:26
    Another very educational video around how to spot fraud and bad management. Found this video using the new RV search tool which is excellent.
  • SB
    Stewart B.
    8 December 2020 @ 17:22
    Fantastic. Clear and thought provoking. A key take away was avoiding shorts that are crowded, story stocks, or growing.
  • ML
    Mehdi L.
    5 December 2020 @ 01:27
    +NKLA
  • DS
    David S.
    3 December 2020 @ 17:35
    Great interview. Excellent thought development. Great at explaining long/short analysis to a regular retail investor. DLS
  • DD
    Dmitry D.
    2 December 2020 @ 12:59
    Wow, this was even better than I expected! Mark is a great thinker as well as a clear and precise speaker and Bernd did a great job as an interviewer
    • MH
      Mark H.
      2 December 2020 @ 15:38
      Thank you! Hope there are some useful lessons here for alpha generation.
    • TM
      The-First-James M.
      3 December 2020 @ 00:01
      Quick plug of the following site to which I subscribe. Does a wonderful job of reporting on the sketchier end of the UK and Eyropean markets, and also did some doorstepping of Follie Follie just before the story blew up on that particular company. Also has a genial relationship with gents like Gabriel Grego and Matt Earl: https://www.shareprophets.com/