Build It. They'll Come.
Bronte Capital co-founder & Investment Officer John Hempton on why he follows corporate fraudsters & short sells shares; and why he was right about Europe’s big stock fraud, Wirecard, but HOW he still lost money on it.
Aug 2, 2020
John Hempton, co-founder and Chief Investment Officer at Bronte Capital, is known for his unconventional approach to investing. In this discussion, he dives into the art of short selling and his fascination with tracking corporate fraudsters. Hempton shares insights on the infamous Wirecard scandal, revealing the shocking failures that allowed €1.9 billion to disappear. He also examines the risks of short selling, the moral dilemmas it presents, and the urgent need for regulatory reform to prevent corporate deceit.
52:19
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Quick takeaways
- John Hempton underscores the critical role of thorough research and portfolio risk management in successfully short selling against corporate fraudsters.
- The Wirecard scandal exemplifies failures in regulatory oversight, emphasizing the need for vigilance to prevent similar incidents in financial markets.
Deep dives
The Eccentricity of Investment Strategies
John Hempton, co-founder of Bronte Capital, emphasizes the unique approach to investment that sets his firm apart, particularly their strong focus on short selling and identifying fraudulent companies. Hempton's career began in the Federal Treasury, where he honed his skills in detecting tax avoidance, which later evolved into a passion for short selling. The firm, founded during the global financial crisis, has successfully grown its funds under management to approximately $1 billion in just over a decade. Hempton's unconventional and eccentric style, combined with thorough research, allows Bronte Capital to capitalize on identifying underperforming stocks while investing in high-quality companies.
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