#034 Carson Block On Latest Shorts And The 'Mass Investing Delusion' Of ESG

Carson Block, the activist short seller, founder of Muddy Waters Capital, and host of Zer0es TV and the Zero F**ks Given podcast, joins Julia La Roche on episode 34.

Block rose to prominence over a decade ago by exposing Chinese companies listed in the U.S. that were frauds. He’s best known for his 2011 takedown of Sino-Forest, which overstated its timber holdings and ended up filing for bankruptcy, causing big-name investors to lose hundreds of millions.

Block is often referred to as an activist short seller because he conducts in-depth research, takes a position, and publicly releases a report explaining his thesis. In the episode, he explained why he prefers the title “investor journalist.” 

In the episode, Block details his two latest short targets — DLocal, a payments company in Uruguay, and Sunrun, a solar panel company. He also shares why ESG is the 2nd "mass investing delusion" he's witnessed.

0:00 Intro

0:31 Origin story as an activist short-selling

1:45 We were getting lied to all the time

2:35 Law School 

3:29 Shorting Chinese stocks

5:45 Conflicts of interest, laziness, and ineptitude in the capital markets

6:55 The Sino-Forest short

9:55 Grifting in the ESG space

13:20 The Sunrun short thesis

19:50 Impact of rising rates

21:18 DLocal short thesis

26:28 DLocal’s response

29:40 Block’s process for building a short thesis

35:05 “Investor Journalist”

38:20 Why short selling exists

42:45 How short selling is perceived

45:02 The “Tick The Box Apocalypse”