One Of The World's Most Infamous Short-Sellers Did An Awesome Presentation On How He Finds His Targets

Carson blockMuddy Waters Research

Muddy Waters Research CEO/founder Carson Block spoke to accounting students at Baruch College on Wednesday afternoon about short-selling.

Block is famous for targeting Chinese companies he believes are frauds.

He’s best known for his takedown of Sino-Forest, which ultimately led hedge fund billionaire John Paulson to lose millions and eventually sell out of the stock. Sino-Forest, which Block said was overstating its timber holdings, eventually ended up filing for bankruptcy.

Block told students how he got into short-selling. He also shared some tips on how he conducts his research when looking for companies to short. Block said that short-selling is a difficult career right now.

We’ve included his deck in the slides that follow.

Here's Carson Block in high school when he 'wanted to be an investment banker.'

Here are some of his life lessons for college kids... He says you won't learn if you won't make mistakes. However, you want to try to only make small mistakes.

Block said that it was Orient Paper that really set him on his career path in short selling.

Sino-Forest was one of Block's famous shorts. Ernst & Young was their auditor.

You have to watch out for CEOs who are put on a pedestal.

Fastow was the CFO of Enron.

Watch out for boards, too.

Remember lawyers are the friends of the companies that hire them.

Companies will use 'market research firms' for legitimacy, he says.

They are not presently short RAX.

Now let's learn from another brilliant short-seller...

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