Investors' Chronicle Vietnam and India will benefit from China’s fall: Carson Block of Muddy Waters Resrearch
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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.
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Challenges in Short Selling
- Short selling has become increasingly challenging due to loose monetary policy and excess market liquidity.
- Activist short-selling is tough because investors have become inured to risk, raising the bar for impactful stories.
Passive Investing's Impact
- Passive investing distorts market dynamics, especially for large-cap stocks like those in the S&P 500.
- This creates market fragility and concentrates returns in a few names, increasing systemic risk.
Betting Against Big Tech
- Betting against large US tech companies (Magnificent Seven) is difficult due to their wide analyst coverage and passive flows.
- Finding impactful information asymmetries is key for activist short sellers.