#75: The World According to a Maverick, Beach–Biding Stock Picker – John Hempton

Selected links

• Follow John: Blog | Twitter
• The Money Miners, by Trevor Sykes
• ‘Three Australian Asset Price Bubbles’, conference paper by John Simon
• Once in Golconda, by John Brooks
• The Go-Go Years, by John Brooks
• Manias, Panics, and Crashes, by Robert Aliber and Charles Kindleberger
• Extraordinary Popular Delusions and the Madness of Crowds, by Charles Mackay
• This Time Is Different, by Carmen Reinhart and Kenneth Rogoff
• The Land Boomers, by Michael Cannon
• Bronte Capital’s December 2017 Client Letter
• Fooling Some Of The People All Of The Time, by David Einhorn
• Bronte Capital’s June 2011 Client Letter
• ‘What is Amazon?’, blog post by Zack Kanter
• ‘Drug Short’, the Netflix Dirty Money episode featuring John Hempton
• Bronte Capital’s March 2010 Client Letter

Topics discussed

• Why Marc Cohodes is John’s model of how to pick stocks and how not to run a portfolio. 3:44
• Why did John move from Sydney to Adelaide while he was at university? 7:22
• How John met his mentor Ken Henry and became an expert on tax avoidance. 9:48
• When and why did John first start trading stocks? 15:11
• The intoxication of bull markets and the sobering powers of financial history books. 16:36
• Leverage is for the young. 22:18
• VoiceNet — the first fraud that John discovered. 26:13
• The email that changed John’s life. 31:32
• The sorry tale of Bre-X. 44:22
• Portfolio management is key. 53:00
• Why John would rather be Warren Buffett than the greatest of the short sellers — and some basic portfolio heuristics. 53:50
• How many frauds does Bronte short on average and how many could it potentially short? 1:03:53
• How does Bronte balance its longs and shorts? 1:05:51
• The story of how John landed his first job in finance, at Platinum Asset Management. 1:09:00
• How John finds short ideas through dodgy brokers’ notes. 1:17:52
• How to get hired in finance. 1:19:07
• Learning from books. 1:24:49
• What lessons and anti-lessons did John learn from Kerr Neilson? 1:29:39
• John’s early retirement, quick comeback, and the birth of Bronte Capital. 1:40:53
• What sort of characters does John look for when searching for frauds? 1:47:43
• Bernie Madoff’s golf scores. 1:59:52
• John’s tussles with Chinese frauds — and the techniques he used to uncover them. 2:01:56
• How John used fake receivables to identify a dating company fraud in the UK. 2:11:23
• Why did Chinese frauds suddenly become harder to knock-off? 2:21:20
• The red flags that helped John identify Valeant Pharmaceuticals as a fraud. 2:25:23
• The morality of short selling. 2:30:23
• How does John structure his days to generate ideas? 2:41:54
• What should young investors or non-finance people do to break into the industry? 2:49:15