On Thursday May 3rd, The New York Athletic Club had the honor of hosting a conference known as “The Art, Pain and Opportunity of Short Selling.”
Investors all throughout Wall Street and across the world have recognized a changing dynamic in the short selling industry and the conference hopes to address some of these changes.
The conference was hosted by the well-known American investor Whitney Tilson and featured a wide range of speakers each discussing topics that are exceptionally relevant to the industry. Tilson is the founder of Kase Capital, an active philanthropist, and the author of the several widely read books including The Art of Value Investing: How the World’s Best Investors Beat the Market.
Tilson is just one of several highlighted speakers that expected to attract a sizable crowd. Sahm Adrangi was also noted as one of the key speakers of the highly anticipated event, and featured as the first speaker (following welcome remarks from Tilson). Adrangi has established himself as a namesake in the industry due to his successes turning his company Kerrisdale Capital from a $1 million startup into an enterprise managing more than $150 million in assets. He is also well known for his detailed research and his success shorting several fraudulent companies in China and elsewhere around the world. Naturally, he plans to get the conference off to an engaging start and speak specifically about Ad Fraud Opportunities.
Based off of recent news and industry trends, it seems that Adrangi’s address is particularly relevant. Though ad fraud is obviously something that the business community has an ongoing obligation to try to defeat, there is no denying that—while such a problem exists—it is something that investors may have the opportunity to take advantage of when market conditions are right.
The core components of Adrangi’s address focused on recognizing the links between fraud and short-term investment opportunities, knowing the impact of ad fraud on the market, and focusing on diligence as an investor. Ad fraud is something that, as would be expected, usually precedes a significant dip in a company’s stock. Recognizing these trends before they actually occur gives investors an excellent opportunity to short sell specific stocks.
In addition to these valuable remarks from Sahm Adrangi, conference attendees also had the opportunity to listen to David Einhorn and numerous other important names in the industry. Einhorn is the president of Greenlight Capital, a company he first founded in 1996. Einhorn is also the author of the book Fooling Some of the People All of the Time: A Long Short Story. His knowledge of the interest and significant experience as a short seller make him uniquely qualified to deliver what the conference cleverly referred to as a “fireside chat.” Einhorn took the center stage from 9:30 to 10:00 am.
Tilson’s organizational efforts and ability to recruit a wide range of different speakers is one of the many reasons the conference turned out to be quite successful.
In addition to the valuable industry experts mentioned above, the conference also featured Soren Aandahl (Glaucus Research Group), Enrique Abeyta Ubillos (Project M Group), and numerous others. The featured speakers touched on a wide variety of topics ranging from “The Best/ Worst Short We Ever Had”, “Tesla is STILL a Zero”, “The Other Greek Parmalat”, to everything in between.
The conference—which opened with a breakfast at 7:15 and closed with a reception at 4:30—was designed to focus on the specific nuances in short selling that are often overlooked, even by well-informed investors. The organizers specifically sited that the current long bull market has taken a damaging toll on short sellers and the distribution of this valuable information is particularly needed at this point in time.
The timing of this conference, it seems, could not possibly be any better. As many of the market’s largest players have revealed to have first quarter earnings that are significantly different than originally anticipated, there is no doubt that there will be increased activity from those in possession of both long and short positions over the next few weeks. Finding unique ways to recognize if and when a stock is objectively overvalued—doing things such as following Adrangi’s advice about paying attention to ad fraud—can surely help even modest portfolio managers increase their return on investment without having to assume an unreasonable level of risk.
Organizers have also claimed that “a major goal of this conference is to help create a community of serious short sellers to facilitate the sharing of ideas for everyone’s greater success.” An excellent opportunity for those who are hoping to expand their network, learn more about the details of the industry, and create lasting partnerships. Naturally, networking is something that is at the heart of major conferences such as this one. With the impressive lineup that assembled by Tilson and his team, this conference is one that investors of all kinds surely did not want to miss out on.
Overall, this conference has become a highly anticipated single-day event for those who are working on Wall Street. The specific conditions of the market, the clear evidence that many short sale opportunities are currently being overlooked, and the widespread need to develop a new short-selling strategy are all reasons that the turnout was quite high. The conference has been described by some as the “first of its kind.”
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