Carson Block and his firm Muddy Waters have become a very-high profile short-sellers. His target is usually U.S.-listed Chinese companies that have been involved in some form of shenanigans.
Block explains that the Muddy Waters approach involves looking at situations that are hard to understand and therefore there is more of a chance of finding something that other investors aren't aware of.
The key is finding a thesis that is contrary to the popular perception.
Muddy Waters has generally avoided going short positions that are "regulatory shorts" like Ackman's Herbalife (HLF, Financial) bet because it is tough to predict what the regulators are going to do.
Block explains that the Muddy Waters approach involves looking at situations that are hard to understand and therefore there is more of a chance of finding something that other investors aren't aware of.
The key is finding a thesis that is contrary to the popular perception.
Muddy Waters has generally avoided going short positions that are "regulatory shorts" like Ackman's Herbalife (HLF, Financial) bet because it is tough to predict what the regulators are going to do.
