We're not playing for a multiple reduction, or a reversion to the mean for the industry. My biggest mistakes have generally been because I stayed with shorts just because they were expensive. The multiple game is a dangerous one valuations can be crazy and stay crazy. We typically want to see something already or soon [...]
I guarantee that in every great blow-up there has been at least one big-name investor involved all the way down. Don't stop your work on the downside because you can't imagine so-and-so owner making a mistake. It happens all the time.
Short selling is now a lot more acceptable than it was, but it's still difficult. People question our motives and say things like “What's your vested interest? Aren't you saying that just because you expect the stock to go down?” Well, yeah . . . don't people who are long say positive things because they [...]
The first and most lucrative category of short ideas are the booms that go bust. We've had our most success with debt-financed asset bubbles as opposed to just plain asset bubbles where there are ticking time bombs in terms of debt needing to be repaid, and where there are people ahead of the shareholders in [...]