Investors' Chronicle
Vietnam and India will benefit from China’s fall: Carson Block of Muddy Waters Resrearch
Feb 18, 2025
Carson Block, founder of Muddy Waters Research and a prominent short-seller, discusses the future of investing in a shifting global landscape. He shares insights on why China is becoming uninvestable and why Vietnam and India are emerging as robust investment opportunities. Block also reflects on the challenges faced by activist short sellers, particularly in the UK market, and explores the potential of going against well-known tech giants. His expert perspective combines market dynamics with personal anecdotes, offering a compelling look at current investment strategies.
36:21
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Quick takeaways
- Vietnam is emerging as a major investment opportunity due to geopolitical tensions with China, augmented by strong demographics and workforce.
- China's uninvestability stems from market manipulation and fraud risks, while India offers growth potential despite short-term tax concerns.
Deep dives
Challenges in Short Selling
Short selling has become increasingly difficult due to past monetary policy, particularly since the global financial crisis and the subsequent loose monetary environment that continued through the COVID-19 pandemic. This environment allowed companies to survive longer than expected by securing cheap financing, which complicated the timing for short sellers. Even with rising interest rates post-2022, speculative liquidity remains high, as evidenced by persistent interest in assets like cryptocurrencies. Activist short selling has also been affected, as the bar for identifying significant bad news has risen, compounded by increasing litigation from companies and a lack of understanding from regulators.
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