Sorry to shout but this really is like striking oil in your backyard goldmine. I admit I’m a little late with this but it only came to me when I was reading a post over at Bronte Capital. In an era of rampant accounting control fraud, where scumbag managers loot the companies that employ them to the detriment of shareholders, the trade of the century is obviously to short the companies run by scumbags and, here’s the kicker…..go long the scumbag managers. Duh! I don’t know how I missed the other side of the perfect pair trade before.
Naked shorts on even the most blatantly pillaged companies can bleed you dry before investors come to their senses. But with this trade whether the stock goes up like an internet IPO with both profits and a business plan or drops like a bank holding nothing but Greek debt bought at a premium, this is a guaranteed winner because there is no way any self-respecting scumbag are going to let the company do better than they do. Remember those bonuses on Wall St when the banks were belly up bailout beggars?
At this point you may be scratching your head trying to figure out how to get long scumbags. It’s a difficult question but I suggest you contact Goldman Sachs. If they can dance around the rules to sell you shares of Facebook before it’s public I don’t see any reason they can’t sell you shares of scumbag managers too. Isn’t that the reason derivatives were invented?
As always, you’re welcome.