The Joe Walker Podcast (Jolly Swagman formerly)

The Joe Walker Podcast (Jolly Swagman formerly)


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

July 10, 2019

This is a rerun of a conversation I recorded in May 2018 with legendary short seller Marc Cohodes.

Show notes
Selected links

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Follow Marc Cohodes: Twitter

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Lernout & Hauspie, the company at the center of one of the largest securities frauds in European history, which Marc successfully shorted

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Key moments from Elon Musk’s infamous Tesla earnings call

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NovaStar Financial: A Short Seller’s Battle, case study on Marc by The Harvard Business Review (also readable on page 6 of this pdf)

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MiMedx’s website (NASDAQ: MDXG)

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Marc’s website on MiMedx: Petiteparkerthebarker.com

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Video of Marc at a MiMedx shareholder meeting

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Viceroy Research’s report: “Viceroy’s MiMedx Greatest Hits”

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Overstock.com (NASDAQ: OSTK) – the company Marc once shorted and is now long.

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“Every saint has a past, and every sinner has a future” – Joe’s favourite quote by Oscar Wilde

Topics discussed

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How did Marc first get hooked on trading? [5:26]

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Data Access Systems: when a young Marc got burnt by fraud and turned to the “dark side”. [7:01]

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How does Marc handle a conversation with someone who’s lost money on his recommendations? [9:50]

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Marc’s definition of short selling. [17:30]

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What are the typical instruments that short sellers use to bet against companies? [20:38]

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The dynamics of a “short squeeze” [21:46]

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What companies does Marc NOT short vs. what companies he does, plus an easy acid test to tell the difference. [24:38]

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Why Marc should work for the SEC. [30:04]

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How to spot “fads” and “failures”. [31:19]

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Why Marc doesn’t like to “wrestle jaguars out of trees” – including Tesla. [40:25]

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How does Marc keep confidence in his thesis when the whole world is against him? [45:27]

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Why longs and shorts don’t mix. [50:29]

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The “Wig Indicator”. [53:19]

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The red flags and tells Marc looks for when deciding whether to short a company. [55:38]

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The full story of Marc’s short on Lernout & Hauspie. [ 1:04:17]

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What does Marc’s average day look like and what is “EFK”? [1:21:11]

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The state of the Canadian and Australian housing markets. [1:33:00]

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How Marc exposed NovaStar Financial and the time he went to Vegas. [1:37:20]

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The tragedy of 2008 and Marc’s take on how his hedge fund Copper River came undone. [1:52:46]

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