Liberty

Yeah, Cohodes' interviews are pretty meh on the details, but that's TV for you. Good interviews are rare, and it's quite obvious that he doesn't want to go into any specifics for legal reasons (he's been sued multiple times already). Every time he's pushed to go there, he goes back to more general things. Wherever he gets his info, I think lately he's been good at pointing out rotten apples, and that's a valuable skill to have. Once he points them out, you can have a look and see what you think. It's not about blindly trusting his work, just like you shouldn't do that on the long side, even if you have fave longs that generate good ideas for you. Most of the people I follow are longs, so I like to get a dose of something different in my diet.

I have no problem with shorts talking their book as longs do that as well (although I don't like that practice). I do have a problem with spreading misinformation and deliberately misleading insinuation without any support. This is the double standard again. He's not a prosecutor, he's an investor. He doesn't have to prove everything he says anymore than a long has to prove what they're saying. They're sharing stuff, and you do your own thinking and diligence and decide if you agree or not. You happen not to agree because you trust the company's financials and have some views on the Canadian real estate market. I have different views. Cohodes, like many, is pretty good at publicizing his wins - but what about his losses? And you think he intends to do that just because he says so? He was on the other side of me on EBIX years ago, and he still talks about it as a loss ¯\_(ツ)_/¯ I don't have to agree with everything he says, he's not my god, I just think he's making good points about a few companies lately. As far as doing what he says, who knows. Same question applies to any long who talks about what they're doing. How do I know you're not secretly short HCG and you're just saying all this to confuse me? How can you prove anything that anyone says? You make your own calls and develop judgement and try to be right more often than you're wrong, that's all that anyone of us strive for in this business. I'm a lot more suspicious now of a long like Donville who has been praising some stocks on TV at the same time as he was selling his stake... And who often praised HCG without disclosing clearly that he had been on their investment committee in 2007 and had a paid relationship with the company. As far as a I know, Cohodes hasn't done anything like that, he's just a chicken farmer who likes to do multi-year shorts and get sued by CEOs who think all their problems come from short-sellers. http://www.homecapital.com/press_releases/2007/Home%20Capital%20Group%20Appoints%20Jason%20Donville%20as%20Chief%20Investment%20Officer.pdf Concordia was another Donville top pick at $43, iirc.

Funny how shorts always have a higher burden of proof and draw more suspicion with regard to their motives than longs... Be wary of that premise. There is no reason to suggest that shorts in general do more work than longs, although in general they seem to broadcast themselves more audibly. That's what I'm saying, they're no better and no worse. There's a million articles by longs saying that everything is great and will go higher. But when a short says things are bad and going lower, well, that's judged differently! Look, I've heard things from both sides and I happen to lean more toward the short side on HCG. It's an opinion. It's not high conviction and I don't short so I'm not putting much time behind it, but I also have opinions on lots of other companies, so it's not a big deal. It seems like a pretty crappy company with crappy management and crappy culture, they've been riding a wave for a while but now the cracks are starting to show. These are a dime a dozen, especially here in Canada. Cohodes was pretty right on Concordia and Valeant, and HCG so far. For every Cohodes, there's a thousand longs who pump things the other way, so why is he singled out? That's what I meant by double standards. If I agreed with a long instead, nobody would tell me to "be careful listening to longs". Cohodes has been short HCG since 2014 iirc and seems to plan to ride it into the ground, similarly to CRX and VRX, he's not a trader going for a quick market manipulation. That's as admirable as a long-term investor, IMO. I'm not wired to do that kind of things, but I think the market needs more people like that to balance things out.

Funny how shorts always have a higher burden of proof and draw more suspicion with regard to their motives than longs... I'm just a casual observer of HCG because it's tied to the Canadian RE market, which interests me. For years I've read what the longs say about it, from Donville to the people on the FEB, so I'm familiar with the thesis. So far it's been wrong, but time will tell. I don't really want to dig deeper because, frankly, I don't care enough about it. If you do, and have conviction, as I said, feel free to invest in it and make a lot of money. If Canadian RE corrects big time and defaults start to go up, it'll be interesting to see what happens when regulators start digging into all the paperwork and supposed due diligence that had to be done by lenders and find boatloads of irregularities... There's always the theory -- securitization reduced risk in the US, insured mortgages protect lenders in Canada -- and then the practice when shit hits the fan. Taxpayers won't be happy about bailing out lenders who gave huge million+ mortgages to regular folks so they could buy overpriced condos and shacks just because our system happened to have incentives that created huge moral hazard (lend to anyone who has a pulse and keep the upside, but the downside is supposedly capped because CHMC will take care of it...).

Geoff was one of the first online value investing guys I followed back in the day, I'll definitely listen to this one, thanks.

Liberty, it's probably not a good idea to get your information from twitter short-sellers - they're not exactly a very fair source. It's also probably not a great idea to base your view on a company by how its stock is doing on any single day. First National is the largest monoline lender in Canada by far and handle substantial underwriting and origination for the Big Banks - in fact, they are so good at underwriting, originating and servicing that their arrears rates are even lower than that of the Big Banks and that the Big Banks even outsource those functions to First National. Home and Equitable are the two largest federally-regulated lenders after the Big Banks and occupy dominant positions in a niche-type market. Check out their NPLs and loss rate history if you're worried about their underwriting. It's no wonder that short-sellers love these stocks - the float's small, they're not liquid and they're all pretty easy to manipulate given the narrative and fear over anything related to Canadian real estate. I'm sure it's because of the shorts that fraud and lax lending standards were uncovered, the second CEO in a short period was fired, insiders have been selling rapidly, and the company can't even earn decently in a huge real estate bubble in Canada. Based on what I know about the company, I don't trust their financials, so looking at them to be reassured isn't an option. But if you think they're so wrong, I expect you can make a lot of money with your variant perception by buying it hand over fist. Time will tell who's right. Meanwhile, the stock is at almost 5-year lows and falling fast... Personally, I have no position as I don't short.

HCG, First National Financial, and Equitable going down the crapper... Canary in coal mine?

https://www.youtube.com/watch?v=4G2carVhVJk Trailer for the movie based on this book about Bernie Madoff: https://www.amazon.com/Wizard-Lies-Bernie-Madoff-Death/dp/1250007437/ Looks promising, IMO.

Did you take notes? (sounds interesting but my book pile is friggin stratospheric...) I posted excerpts I found interesting on my Twitter, if you feel like digging those up.

http://www.macleans.ca/economy/realestateeconomy/a-day-of-insanity-that-typifies-torontos-housing-market/ "A day of insanity that typifies Toronto’s housing market: When the real estate expo came to Toronto, attendees were fed a steady dose of hype and hoopla about how to get rich trading houses" Read the whole thing. It's pure gold. So many parts I'd want to quote..

https://www.amazon.com/Matchmakers-New-Economics-Multisided-Platforms/dp/1633691721 Interesting book about multi-sided platforms (Visa, Google, AirBNB, Uber, Facebook, OpenTable, nightclubs.. that kind of stuff). While the topic is very interesting and the book does a good job of explaining the main insights about it, it does feel a bit like a 20-page paper that was stretched to book-lenght, so it gets redundant. I still think it's worth getting if the topic interests you, but maybe read until it gets too redundant and then skim the rest. That's what I did.

Describe modern air travel, or space rockets and satellites, or a modern CPU with 2 billion transitors, to someone before it has been built and the problems with it have been solved and it'd seem crazy and impossible. Heck, I was just seeing this morning about how before the invention of the thermometer, people didn't think it would be possible to measure precisely temperature: "Before thermometers: philosophers mocked the idea of temperature ever being measurable, with all its nuance, complexity and subjectivity "

Your idea that it's a stupid idea is stupid. See, same level of detail as your analysis.

There's a recent Garth Turner piece where he talks about how home inspectors' business is down 30-50% because now people buy houses without inspectors, as sellers put conditions that there won't be an inspection and they even throw people out of open houses visits if they bring an inspector: http://www.greaterfool.ca/2017/04/03/good-luck/ I'm sure thats' really healthy behavior...

thanks for fixing it, Sanjeev

It's a good one. For those looking for more, here's a couple of my other favorite business-related podcasts: http://www.npr.org/podcasts/510313/how-i-built-this http://investorfieldguide.com/podcast/ http://exponent.fm

achievement unlocked:

A little too rustic for my taste..

Thanks for sharing, TBW.

I enjoyed it too. Not the best ever, but worth reading, especially if you haven't read all the other accounts of Thorp (if you have, it's still good, but some parts will be less surprising).

Finally getting around to reading this, a year after getting it! :P

Thanks for taking one for the team, this is great entertainment. Like a scene straight out of The Big Short.