So You Think You Want to Be a Short Seller?

Published on
August 4th, 2020
Duration
56 minutes

Marko Papic and Mike Green — The Next Decade for Geopolitics and Markets


So You Think You Want to Be a Short Seller?

The Interview ·
Featuring Quinton Mathews

Published on: August 4th, 2020 • Duration: 56 minutes

With valuations stretched, economic turmoil affecting cash flows for huge swaths of the global economy, and high-profile frauds like Wirecard and Luckin Coffee making headlines, it seems like high time to dig in and find the next big short. Quinton Mathews, founding member of boutique investment advisory firm QKM, would say otherwise. In this interview with Real Vision's Max Wiethe, Mathews argues that although researching, publishing, and trading based on your own activist short seller reports can be profitable and fulfilling work, the path is filled with pitfalls like lawsuits and regulator investigations that might not have factored into the P&L you envisioned. He walks viewers through his own journey learning the hard way about the unforeseen costs of short selling, the larger problems within the financial system related to regulation and enforcement, and the epiphanies he has had about shorting at different points in the economic cycle. As well, Mathews puts forward the high-minded goal of starting a dialogue with corporations, regulators, and activist short sellers to improve the system for all market participants. Filmed on July 22, 2020.

Comments

Transcript

  • TS
    Tom S.
    4 August 2020 @ 16:13
    Great interview. Admire Quinton's work and courage. Admire Max: His questions never overpower. They always seem so 'straight ahead', yet often embody subtle insight, raising conversation to the next level. Thanks to both.
    • QM
      Quinton M. | Contributor
      4 August 2020 @ 16:45
      I really appreciate all the kind words by all. And appreciate RV and Max for the opportunity.
    • rc
      ritesh c.
      9 August 2020 @ 23:49
      Quinton, thank you for sharing your thoughts and passion with us. I really enjoyed the interview and learned a lot. The comment on MD&A talk vs. reality was a big take away for me along with litigation volume. I'm a long only investor right now, but I can clearly see how to use the same framework to validate my conviction investments. Thank you so much and keep up the good fight mate!
  • CM
    Cory M.
    7 August 2020 @ 22:33
    Quinton kinda reminds me of Michael Burry (Christian Bale version). Wish I learned more about research methods, though: like 20% of what I do is in the 10k. Enjoyed it.
  • DT
    David T.
    6 August 2020 @ 16:32
    Corporate Rule of Law is destroying America.
  • YB
    Yaj B.
    6 August 2020 @ 04:19
    Very Interesting Interview indeed! Thanks to Max and Quinton. There's a lot to learn from this interview. It's a keeper!
  • MD
    Matt D.
    5 August 2020 @ 04:06
    Nice interview. Thanks Max and Quinton. "You have to go big or you have to go home" - I like your style with that. I agree that we should have the right to address risks in the markets without the threat of litigation. Lying short sellers will be found out just as dodgy companies would (should) be. The pump and dump side "never" gets criticised yet you'll hear "ban short selling" all the time. I think, just off the top of my head, that a powerful idea for this could be common knowledge group dynamics.
  • HH
    HODL H.
    5 August 2020 @ 00:52
    Man is smart, clear his shelves and background of anything that can identify his friends, family, interests, accolades etc. this was a great interview and hopefully he is on again! Well done and stay strong man!
    • QM
      Quinton M. | Contributor
      5 August 2020 @ 03:07
      I wish it was that thought out. Just under a little construction, so empty is the default :)
  • JW
    Jim W.
    5 August 2020 @ 03:07
    I enjoyed the interview and the discussion. The points that Quinton raises about free speech are disturbing, though--essentially unless you are ready to spend a couple of hundred thousand USD fighting, then you can be shutdown pretty easily. The best ever case I've seen of handling shorts was Reed Hastings at Netflix with Whitney Tilson back in 2010. I haven't seen a public company CEO respond that way since. <https://www.businessinsider.com/netflix-ceo-reed-hastings-responds-to-whitney-tilson-cover-your-short-position-now-2010-12> Some gems from Hastings: "Moving to more interesting angles, Whitney documents our recent decreased FCF conversion due to us paying for content earlier than we had in the past. With this angle, Whitney does draw a little blood. " or "An issue that Whitney did not bring up is potential Netflix international expansion that would shrink global margins in the short term." I wish they taught that case at HBU.
  • FB
    Frank B.
    5 August 2020 @ 03:06
    This is such a great interview! Itโ€™s a David and Goliath story and I can definitely appreciate Quinton sharing his story.
  • MJ
    Max J.
    5 August 2020 @ 01:32
    Great, interesting and encouraging. Quinton is following the other warriors in his field (Marc Cahodes, Carson Block, Roddy Boyd, Dan David etc), WE need all of them!
  • MH
    Muddshir H.
    5 August 2020 @ 00:58
    Great interview
  • JD
    James D.
    4 August 2020 @ 23:13
    Where else will you get this information? David versus Goliath and all that goes along with such a terrific story. I respect Quinton for laying it out there and fighting for truth. The market is better for it. Thank you!!
  • TB
    Tobin B.
    4 August 2020 @ 21:08
    Enjoyed the discussion. Further on the topic - what about having Thomas Kaplan of Novagold back on? After the midsummer beat down amidst J Capital's report, it could be interesting to hear from him.
    • MK
      Michael K.
      4 August 2020 @ 21:40
      I really like him and I own some shares but heโ€™s very salesy and slick. The manic psycho response kind of disturbing to the J Cap report.
  • DS
    David S.
    4 August 2020 @ 19:52
    Well done. It is the board of directors and its chairperson that represent the shareholders. I would suggest adding chairpersons to your search for new presentations. If I were on the board of directors, at the first sign of a well-documented short position paper, I would call in the internal auditors to objectively review the report and interview the author of the report if helpful. This should be done even if the chairperson is the CEOs. It is interesting that a lot of CEOs are interviewed about shorts on TV, but normally not chairpersons. DLS
    • QM
      Quinton M. | Contributor
      4 August 2020 @ 21:37
      Great point on the board. Goes along with discussion of making board investigations transparent.
  • JS
    Jon S.
    4 August 2020 @ 19:45
    Nice one I need to watch it over and over again. Such an interesting world!
  • OA
    Oliver A.
    4 August 2020 @ 16:52
    Great to get a little more perspective behind the scenes of short sellers.
  • AK
    Aleksandr K.
    4 August 2020 @ 13:54
    What a cool guy ๐Ÿ˜Ž RESPECT ๐Ÿ™Œ
  • Dg
    David g.
    4 August 2020 @ 12:09
    Great interview.