John Hempton: What Makes Shorting Frauds Fundamentally Very Dangerous

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TL;DR Fraudster CEOs can simply increase their level of fraudulence which would mean a big loss to shorts.


So it’s just the old saying, “the market can stay irrational longer than you can stay solvent”.


Stonks only go up


John Hempton is my second favorite writer of financial wisdom on the internet. I love his stuff. Search for “Bronte Capital Blog” He runs a hedge fund in Australia that shorts mostly Chinese fraudulent companies. Which yes, ain’t easy waters to navigate.


Can someone explain the numbers in the post and how he became 95% in the position and why / how the bank would approach this