Odd Lots John Hempton on Greensill, Archegos and What It's Like To Short Right Now
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Apr 19, 2021 In this insightful discussion, John Hempton, CIO and co-founder of Bronte Capital, shares his expertise in short selling amidst a volatile market landscape. He unpacks the high-profile collapses of Greensill and Archegos, revealing the disconnect between soaring stock indices and underlying financial risks. Hempton highlights reckless lending practices, dubious financing strategies, and the challenges posed by increased retail investor participation. With a sharp focus on modern investment trends, he emphasizes the need for savvy risk management in today’s trading environment.
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Questioning Greensill
- Greensill's rapid growth in trade finance was illogical and unsustainable.
- Journalists like Duncan Mavin and Robert Smith, along with John Hempton, questioned its practices.
Credit Suisse's Risk
- Credit Suisse, selling Greensill paper as AA-rated and insured, likely faces significant losses.
- Mis-selling such products often leads to the seller bearing the losses, not the client.
Bill Hwang's Gamble
- Bill Hwang, with a history of aggressive investments, revealed himself as a degenerate gambler.
- Leveraging bets on controversial stocks can yield big wins, but the crowd is often right, leading to significant losses.