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I have made the decision to disband Hindenburg Research

hindenburgresearch.com

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Re: I have made the decision to disband Hindenburg Research

#191

Post by Dylan16807 »

BeetleB wrote: post #63
tines wrote: post #57

Earlier quoted context omitted.

I think you misunderstood what I meant by "your money" in "double your money" (and I was unclear). You can only earn the value of the stocks you borrow. When trading long, the gain is unlimited. According to Investopedia, "the Federal Reserve Board requires all short sale accounts to have 150% of the value of the short sale at the time the sale is initiated" so it's the same principle as going long with margin. You c…

You borrow 10 shares that are currently worth $10 each. You immediately sell and get $100. The price drops to $1 per share. You spend $10 to buy those shares and return your loan. So you spent $10 and made $90. That's a 9x gain. Yes you cannot make more than $100. But of course you can! Do the short on 1000 shares instead of 10. The more confident you are of the share price going down, the more shares you borrow. Unl…

You need to put up a lot more than $10 to do that borrow. Quite limited upside.

Re: I have made the decision to disband Hindenburg Research

#192

Post by Dylan16807 »

sidewndr46 wrote: post #161
tines wrote: post #57

Earlier quoted context omitted.

I think you misunderstood what I meant by "your money" in "double your money" (and I was unclear). You can only earn the value of the stocks you borrow. When trading long, the gain is unlimited. According to Investopedia, "the Federal Reserve Board requires all short sale accounts to have 150% of the value of the short sale at the time the sale is initiated" so it's the same principle as going long with margin. You c…

uhh, no. When trading long your gain is limited by the depth of the order book. Stock price isn't relevant if there are 3 buyers out there looking to buy 2 shares each and you're sitting on 100,000 shares

The order book refills over time and normal humans will never exhaust it.

Re: I have made the decision to disband Hindenburg Research

#193

Post by kqr »

WalterBright wrote: post #147
gmd63 wrote: post #59

I've ironically lost more money the more closely I've paid attention to my investments because I was naively confident in the market's ability (or as I've come to suspect, willingness) to react to evidence of fraud. The amount of deceit put out into the world and gobbled up, on purpose, in business is obscene and seriously depressing. The magnitude of damage to psyches and thus economies that anyone acting in a fraud…

> I've ironically lost more money the more closely I've paid attention to my investments Money Magazine a few years ago compared various investment strategies in stocks. The #2 best performing one was investing in the S&P 500. The #1 best performing strategy was the "dead man strategy". The dead man strategy comes into play when the investor dies, and his estate gets frozen until it winds its way through the courts.…

A few years ago cost structures for managing one's investment portfolios were also significantly higher than today!

There's an even better alternative for someone willing to put in the leg work:

(1) Figure out your investment horizon. For many people, this is way shorter than suggested by generic advice, which makes some diversification beyond "stonks go up" meaningful.

(2) Figure out what costs you'll incur by rebalancing etc.

(3) Write a short script that optimises the amount of activity in portfolio management that improves performance over your investment horizon, given your costs.

Unsurprisingly, the result can vary a lot between people. The result is most likely going to involve a very low level of activity, but the process of finding it out is very informative.

What I've found out (and this is replicated also by more authoritative people like Carver) is that for almost everyone, mixing in some 10--20 % of a safer asset like 10 year bonds and rebalancing yearly outperforms a pure equity portfolio over most realistic investment horizons.

Re: I have made the decision to disband Hindenburg Research

#194

Post by sebmellen »

rcpt wrote: post #138
mv4 wrote: post #127

Earlier quoted context omitted.

Even without fraud, the markets seem incredibly forgiving. For example, one would think that what Crowdstrike outage did to the airlines and businesses worldwide (and the levels of incompetence displayed) in 2024, would have destroyed the company. Instead, the stock has recovered nicely and it's business as usual. Or the massive security breaches - same outcome, it's as though nobody cares.

Equifax should not be in business anymore

We work closely with them and I've been impressed with how broad their product reach is. Whether they should be in business or not is a question for regulators, but the market rewards their unique position. If you to own something valuable that everyone else needs or wants, they will pay you for it.

There's a bigger question about how to properly price and penalize negative externalities. From a business perspective there isn't much difference between an oil spill and a mass data breach — "Whoopsie, we'll try not to do that again. In the meantime don't you need gas for your car?"

Re: I have made the decision to disband Hindenburg Research

#195

Post by alwinaugustin »

I believe Hindenburg Research's most notable expose was on Adani, yet he’s still standing strong. Perhaps the closure could somehow be tied to Trump’s comeback—just a thought. That said, corporate fraud is an endless cycle, and their work might inspire countless others to pursue similar research and investment ventures.

Re: I have made the decision to disband Hindenburg Research

#196

Post by chrismarlow9 »

chii wrote: post #166
WalterBright wrote: post #157

Earlier quoted context omitted.

The conventional wisdom is to sell your profitable stocks, to "lock in your gains", and sell your losers to "cut your losses." I call that "minimizing your gains" and "locking in your losses", and just hold instead. If I "locked in the gains" I would have missed out on 10x returns. Of course, I did ride Enron all the way to zero (!), but it didn't matter. Think of it this way - buy 10 stocks. 3 go to zero. 6 have mod…

> 1 is a 10x winner out of 10 stocks, 1 being a 10x winner is an absolutely rarity and the fact that you would manage to pick it is pure luck tbh.

Oh there's more luck required than that. You have to get lucky many times to win at a 10x stock.

- You have to be lucky enough to find it when it's cheap.

- You have to be lucky enough to hold on to it even if it loses money

- You have to be lucky enough to not sell it when it's at only 5x and hold off for the top

- you have to be lucky enough to have bought enough initially that the return is meaningful to you

These are the thoughts that made me clean up how I invest and stop thinking I'll get lucky at some point just rolling the dice. It's way more luck required than just buying in early.

Re: I have made the decision to disband Hindenburg Research

#197

Post by ilt »

eldavido wrote: post #143
Jimmc414 wrote: post #77

"just feeling like it" seems insufficient explanation for dismantling a successful organization rather than transitioning it they just completed their "pipeline of ideas" with "the last Ponzi cases" - seems like a surprisingly clean and abrupt end for an investigative organization the team members are "brilliant" and "family to me" but heis disbanding rather than transitioning leadership He mentions some team members…

It's 11 people. It's a band breaking up, not Microsoft choosing its fourth CEO.

and very fairly, talks about sharing all the knowledge further so that more such organisations can crop up

Re: I have made the decision to disband Hindenburg Research

#198

Post by semi-extrinsic »

jpcom wrote: post #182
WalterBright wrote: post #163

Earlier quoted context omitted.

I have a friend who retired, and decided to go into day trading. He spent hours each day glued to the trading portal, making trades. After a year, he ruefully admitted that he'd have made significantly more money if he'd simply done nothing.

Sometimes I ask GPT to run Bayesian analyses on varying hypotheses. I just did that for the several parent comments to see if we could get some reasons as to "why day trading doesn't work." Perhaps this will amuse you as well: https://chatgpt.com/share/67888cf4-1aa4-8011-b46b-77e5e9da12...

Is there any reason to believe the probabilities involved in those computations are not just coming straight out of rand()?

Re: I have made the decision to disband Hindenburg Research

#199

Post by xenihn »

chii wrote: post #166
WalterBright wrote: post #157

Earlier quoted context omitted.

The conventional wisdom is to sell your profitable stocks, to "lock in your gains", and sell your losers to "cut your losses." I call that "minimizing your gains" and "locking in your losses", and just hold instead. If I "locked in the gains" I would have missed out on 10x returns. Of course, I did ride Enron all the way to zero (!), but it didn't matter. Think of it this way - buy 10 stocks. 3 go to zero. 6 have mod…

> 1 is a 10x winner out of 10 stocks, 1 being a 10x winner is an absolutely rarity and the fact that you would manage to pick it is pure luck tbh.

I've done it repeatedly over the past ten years while DCA'ing. I basically made my own custom funds with 5-10 stocks, set daily purchases for a specific amount, and didn't think about it. Unfortunately I didn't invest enough each time for the amount to be significant, and I also stopped DCA'ing as soon as I couldn't resist checking, saw that I had reached or was approaching a 10% loss in my overall DCA portfolio, and stopped the auto-buys because I felt like I was starting to burn money, when this was actually the best time to continue investing. I haven't sold anything either though. Overall I'm up 80%, which is only $50k.

I think DCA is the most effective investment strategy. Unfortunately I don't have the discipline to keep it up during a downturn. Next time I try it again with picked stocks will be my 4th time, but for now, I'm doing it with index funds. I'm not going to feel as inclined to pause my purchases during an index fund downturn.

Re: I have made the decision to disband Hindenburg Research

#200

Post by jojobas »

hiyer wrote: post #151
paxys wrote: post #30

Getting out while they are ahead is a smart move, especially considering multiple governments have started to take a closer look at their shorting tactics.

I wouldn't say they were ahead at least in terms of reputation. They targeted India's Adani group and failed. The Supermicro "revelation" was also a damp squib. I suppose they made plenty of money with their short-selling though, so in that sense they are, perhaps, ahead enough.

Looks like the jury is still out on Adani.
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