Short seller revealed
I posted on Greenlight Capital and David Einhorn’s shorting of Lehman months back – David has been shorting Lehman for a long time based on his team’s analysis of the risk underlying Lehman’s business. He did what he thought was right and stuck to his guns despite being attacked by Erin Callan -then CFO of Lehman – and being made a poster child of the short sellers by the New York Times in June of this year.
After writing and researching that post my interest was piqued and so I read David’s book “Fooling Some of the People All of the Time“. It’s a bit wonky but provides a thorough, and thoughtful look into the research that goes behind the great short calls. I’m not talking about rumor driven shorting, I’m talking about months of fundamental research to model out a company’s business and study the discrepancies between what management is saying (and the stock is valuing) vs. what is really happening in the financials and the market of the company.
Given our business is about enabling our users to use the web as a broad, deep research base I love to read about the value of fundamental research to a portfolio manager.
