Classic Episode Rerun: The Legendary, Fraud–Sniffing Short Seller – Marc Cohodes

Show notes

Selected links

• Follow Marc Cohodes: Twitter

• Lernout & Hauspie, the company at the center of one of the largest securities frauds in European history, which Marc successfully shorted

• Key moments from Elon Musk’s infamous Tesla earnings call

• NovaStar Financial: A Short Seller’s Battle, case study on Marc by The Harvard Business Review (also readable on page 6 of this pdf)

• MiMedx’s website (NASDAQ: MDXG)

• Marc’s website on MiMedx: Petiteparkerthebarker.com

• Video of Marc at a MiMedx shareholder meeting

• Viceroy Research’s report: “Viceroy’s MiMedx Greatest Hits”

• Overstock.com (NASDAQ: OSTK) – the company Marc once shorted and is now long.

• “Every saint has a past, and every sinner has a future” – Joe’s favourite quote by Oscar Wilde

Topics discussed

• How did Marc first get hooked on trading? 5:26

• Data Access Systems: when a young Marc got burnt by fraud and turned to the “dark side”. 7:01

• How does Marc handle a conversation with someone who’s lost money on his recommendations? 9:50

• Marc’s definition of short selling. 17:30

• What are the typical instruments that short sellers use to bet against companies? 20:38

• The dynamics of a “short squeeze” 21:46

• What companies does Marc NOT short vs. what companies he does, plus an easy acid test to tell the difference. 24:38

• Why Marc should work for the SEC. 30:04

• How to spot “fads” and “failures”. 31:19

• Why Marc doesn’t like to “wrestle jaguars out of trees” – including Tesla. 40:25

• How does Marc keep confidence in his thesis when the whole world is against him? 45:27

• Why longs and shorts don’t mix. 50:29

• The “Wig Indicator”. 53:19

• The red flags and tells Marc looks for when deciding whether to short a company. 55:38

• The full story of Marc’s short on Lernout & Hauspie. 1:04:17

• What does Marc’s average day look like and what is “EFK”? 1:21:11

• The state of the Canadian and Australian housing markets. 1:33:00

• How Marc exposed NovaStar Financial and the time he went to Vegas. 1:37:20

• The tragedy of 2008 and Marc’s take on how his hedge fund Copper River came undone. 1:52:46

• Marc’s current position on MiMedx. 2:05:41

• The classic technique of “channel stuffing”. 2:13:36

• The FBI visit to Marc’s farm. 2:19:30

• Is Marc afraid of anything? 2:25:20

• What motivates Marc towards the end of his career? 2:35:05

• Can Marc forgive? 2:39:53

• Always avoid thesis creep. 2:44:30