Short-seller Andrew Left gives us his post-election play
(Andrew Left, founder of Citron ResearchBloomberg screenshot)
Andrew Left is the founder of Citron Research, a Los Angeles-based firm focused exclusively on short selling. In October 2015, it released a report accusing Valeant Pharmaceuticals of accounting fraud, and the rest is a battered stock, down 90% from its peak, and little bit of Wall Street history.
Linette Lopez: Can you tell us a little bit about the investment landscape as you see it now? Are you having a hard time finding shorts in this market?
Andrew Left: It is quite difficult finding shorts because the low interest rate environment has changed the investing landscape. Moreover, the good shorts tend to have high negative rebates so you have to be exact on timing. That is why I try to generate alpha on my ideas.
Lopez: Have you formulated any ideas based on the outcome of the election? How are you thinking through that?
Left: I think the result of the election is a conclusion by now. The only idea short term is to see if the government is serious about regulating pricing on prescription pharmaceuticals and what companies are levered up and who can be vulnerable.
Lopez: 2016 is almost over, is there anything you regret doing (or not doing) as an investor?
Left: Good question — I wish I stayed short Valeant longer — no doubt. I have been maturing as a trader (20 years in the making) and cutting losses fast so I am happy with my approach to the market as a trader.
Lopez: You keep saying Facebook will fall, are you going to take a short position? Why don't you like it?
Left: I actually have a pair trade (in my mind) I am long AMZN short FB. Market caps are around the same but long term I see much more value in AMZN. Will be interesting to see how FB matures as the "sharing" phenomenon slows down.
Lopez: You try out a lot of ideas on Twitter and you're active on social media. Do you think that is actually helping your shorts?
Left: No… although in the future I am going to make my reports more social media friendly (infographics) so they can be absorbed easier and shared.
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