Whitney Tilson’s latest email to investors
1) Glenn and I have developed two new programs for high school and college students because we think there’s a real need: it’s important for every young person, ideally by the end of high school, but certainly by the end of college, to learn the basics of economics, business, finance and investing – yet despite spending our entire careers in that world, we’ll confess to doing a lousy job of teaching these things to our own eight children!
This realization, combined with the fact that many students have 2-3 weeks in June with not much going on between when school ends and summer jobs/camps/trips begin, led us to create two seminars that we’ll be teaching from Monday–Friday, June 18-22 at the NY Athletic Club:
Relying On Old-Fashioned Stock Picking, Lee Ainslie Reports His “Strongest Quarter” Ever
Lee Ainslie's Maverick Fund USA enjoyed its "strongest quarter in the fund's history" during the three months to the end of June. According to a copy of the firm's second-quarter letter to investors, which ValueWalk has been able to review, Maverick Fund USA gained 18% in the second quarter. Following this performance, the fund was Read More
- A) An Introduction to Economics, Business, Finance and Investing to late-high-school/early-college students; and
- B) An Advanced Seminar on Finance and Investing to college students, focused on those who might be interested in working in the financial sector over a summer or after college.
The seminars will be taught in adjacent rooms (we will combine them for certain lessons and guest speakers) and each will be limited to two dozen carefully selected students. Attached is further information about the seminars and how to apply.
2) I just watched The China Hustle yesterday and it’s OUTSTANDING – I highly recommend it. It traces the sordid story of ~400 Chinese companies that went public in U.S. markets via reverse mergers mostly right after the financial crisis – and nearly all of them were total frauds, which ended up costing U.S. investors $20-50 BILLION!
The Chinese were active participants in this massive scam, but it could never have happened without U.S. players who were active participants in it or, at the very least, looked the other way, ranging from investment banks like Roth Capital Partners and the now-defunct Rodman & Renshaw, the big four auditing firms, certain law firms, etc. – and of course the SEC was completely asleep. A total, complete and utter disgrace all around!
The good guys are the short sellers who did incredible forensic research and uncovered the frauds, many of whom are speaking at my shorting conference on May 3 (four weeks from Thursday; register at http://bit.ly/KaseRegister; use discount code FF20 to save 20%): Carson Block of Muddy Waters, Soren Aandahl of Glaucus Research Group, and Chris Irons of GeoInvesting (his colleague, Dan David, is the main protagonist of the movie). Also speaking at my conference, but strangely missing from the movie, is Sahm Adrangi of Kerrisdale, who absolutely nailed numerous China frauds. Others in the movie who deserve a shout-out are Jim Chanos, Herb Greenberg, Roddy Boyd, Jon Carnes, and his analyst, Kun Huang, a Chinese-born Canadian citizen who was jailed for two years in China for doing research on Silvercorp.
Here’s a good article about the movie: ‘The China Hustle’ Is The Most Important Film Of 2018, www.forbes.com/sites/markhughes/2018/03/30/review-the-china-hustle/#18306d633578. Excerpt:
‘The most important movie of 2018 is one you may not have even heard of. But it’s a story that could be directly affecting you, endangering your financial stability and your future. If you have a 401(k) that’s lost value, or if you’ve lost a portion of your pension, there’s a chance this picture explains part of the reason why. The film is The China Hustle, opening this weekend in limited release and on select streaming services, and it is a klaxon warning of potentially impending economic disaster.
From the producers of the Oscar-nominated Enron: The Smartest Guys In The Room, The China Hustle is directed by Jed Rothstein, director of the Academy Award nominated documentary Killing in the Name. This isn’t an exposé of a foregone scandal, mind you, but rather an ongoing one with major implications for our economy and that of China. Whatever short term financial gains exist for the businesses, banks, auditors, lawyers, and others involved in perpetuating or benefiting from the practices outlined in the movie, the long term damage won’t be limited to investors who get fleeced, and will instead inevitably implicate and harm entire sectors of both nations’ economies while destabilizing trade and banking for years.
Here’s the official trailer: https://youtu.be/55892jT06aI
And here’s the best part: you don’t even have to do to the theater to watch it – you can watch it right now for only $6.99 on video on demand on your TV via most cable providers, on YouTube, iTunes, Google Play, and Amazon Video.
3) Speaking of shorting, here are two related articles by Michelle Celarier:
- a) The Dangers of Short-Selling Disclosure: An Herbalife-backed legislative proposal has hedge fund managers feeling the squeeze., https://www.com/article/b17jxns6qv5y3r/the-dangers-of-short-selling-disclosure
- b) An interview with Sahm Adrangi about short selling in today’s markets: worth.com/qa-short-seller-sahm-adrangi
4) Lastly, here’s an excellent in-depth article from an Australian newspaper on the rise of activist short sellers. It highlights Sahm’s work exposing various China frauds and also features Carson Block, Soren Aandahl, Kyle Bass, Gabriel Bernarde, Aidan Lau and Fraser Perring of Viceroy, and Zatarra (anonymous).