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

This is a rerun of a conversation I recorded in May 2018 with legendary 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)
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