The Most Dangerous Trade

The Most Dangerous Trade serves up tales from the dark side of the world marketplace to reveal how traders profit from the failure and, often, the financial ruin of others. In this book Richard Teitelbaum profiles more than a dozen short sellers to reveal how they employ the tactics, strategies, and various styles to zero in on their target, get the needed financing, and see their investment through to its ultimate conclusion.

The short sellers profiled will include stories of both their successful investments as well as their disastrous ventures. The book will examine the different styles, strategies, and tactics utilized, looking at how each short seller researches his or her targets, obtains financing, puts on a trade, and sees the investment through to fruition—or failure. With the appeal of a well-written adventure novel, The Most Dangerous Trade reveals how these investors seek publicity to help drive down a stock and shows the often bitter and controversial battles that ensue.

• Includes profiles of well-know short sellers such as Jim Chanos, Steve Eisman, Manuel Ascencio, Doug Kass, and many more
• Discover how short sellers make the "puts" that make them billions
• Uncover the short selling controversies that make headlines
• Written by award-winning journalist Richard Teitelbaum

Discover what motivates investors who wager against the stock market and how they often profit from the misery of others.

Preface vii

Chapter 1 Ackman: The Activist Grandstander 1

Chapter 2 Asensio: Exile on Third Avenue 27

Chapter 3 Chanos: Connoisseur of Chaos 51

Chapter 4 Einhorn: Contrarian at the Gates 87

Chapter 5 Block: Playing the China Hand 125

Chapter 6 Fleckenstein: Strategies and Tactics 153

Chapter 7 Kass: Nader’s Raider Hits the Street 177

Chapter 8 Tice: Truth Squad Leader 203

Chapter 9 Pellegrini: Behind the Great Subprime Bet 227

Chapter 10 Cohodes: Force of Nature, Market Casualty 257

About the Author 297

Index 299

“…a good guide to the red flags that the most successful short sellers look for in companies…..at its best it crackles with the fun of a private detective novel…” (Financial Times, September 2015)

RICHARD TEITELBAUM is a contributing editor to Institutional Investor magazine. He worked as a senior writer for Bloomberg News, where he shared an award from the Society of Professional Journalists for investigative reporting; as an investing editor for the New York Times; as a writer for Fortune magazine; and as a traffic reporter in San Francisco.

The Most Dangerous Trade serves up a range of fascinating tales from the underbelly of the global marketplace. Investigative journalist Richard Teitelbaum reveals how short sellers navigate the darker side of events—the miscalculations, fraud, and follies—that help them profit from the failure of individuals, companies, markets, and nations.

Short sellers are figures of intense controversy who some say operate at the fringe of accepted financial practices. Throughout The Most Dangerous Trade, former New York Times and Bloomberg News journalist Richard Teitelbaum profiles more than a dozen short sellers—an assortment of loners, firebrands, cynics, liars, and losers—to reveal how their investments have made and lost them millions and even billions.

The book is filled with stories of successful investments as well as disastrous ventures. The Most Dangerous Trade examines the tactics of well-known short sellers such as: academic and hedge fund manager James Chanos, Herbalife short seller William Ackman, "Demolition Man" Manuel Asensio, and former harness horse racer Doug Kass. The author puts the spotlight on their different strategies, approaches, and various styles as they zero in on their targets, structure trades, and see their investments through to their ultimate conclusions.

Written in a style and pace that could be easily mistaken for an adventure novel, The Most Dangerous Trade shows how these investors seek publicity to help drive down a stock and details the often bitter and controversial battles that ensue.

The Most Dangerous Trade chronicles the serious breakdowns—financial, regulatory, ethical, and structural—that accompany short-selling campaigns, and offers a look at what motivates investors who wager against the stock market.

HOW SHORT SELLERS PROFIT FROM DISASTERS THAT AFFLICT COMPANIES, MARKETS, AND NATIONS

"The natural state of a collapsing universe is the breaking down of order. Short sellers understand this and seek to profit from it."
—From the Preface

The Most Dangerous Trade puts high-profile short sellers under the microscope to examine their different investment styles, strategies, and tactics. Based on years of research (and hard-won interviews), award-winning journalist Richard Teitelbaum profiles more than a dozen short sellers including well-known investors such as James Chanos, William Ackman, Manuel Asensio, and Doug Kass. The author includes stories of both their winning investments as well as their financial missteps. The book shows how each short seller researches his or her targets, puts on a trade, and sees the investment through to riches—or failure.

The Most Dangerous Trade offers up a cornucopia of short-selling tales, including the greatest short sellers, the most notable trades, and roiling controversies.