PODCAST: Bronte Capital hedge fund manager John Hempton on what makes a good business, and the perils of shorting stocks

L-R: Business Insider Australia editor-in-chief Paul Colgan, Bronte Capital founder John Hempton, and BI’s global markets correspondent David Scutt.

John Hempton is one of the best-known names in the Australian finance industry.

His fund, Bronte Capital, recently closed to new money having exceeded more than $700 million in funds under management.

In the latest episode of the Devils and Details podcast, Hempton sets out some of the ways he thinks about companies — the good and the bad — and shares some insights on how Bronte finds companies to buy as well as target for short-selling.

The conversation covers business models for everything from Apple, aircraft parts manufacturers and tobacco companies to decking manufacturers and mining exploration companies. Also on the show:

  • Hempton reveals Bronte has taken short positions in around 900 companies over the past decade.
  • He explains how the fund uses a computer program to find “scumbags” — people who have previously been involved in frauds — and tracks their involvement in various businesses.
  • The aircraft parts maker whose technology changed the efficiency of global aviation.
  • Why shorting is so dangerous, can rapidly destroy wealth — and what it’s like when it goes wrong.
  • On crypto, Hempton says he has had no interest until recently, when people who used to promote bad companies started showing up promoting ICOs.

You can find the show here on iTunes or by searching “Devils and Details” on your podcasting platform of choice. You can also listen online here or by hitting play below.