Ep17 “Can The Free Market Discourage Fraud?” with Marc Cohodes

12/07/22 • 26 min

There’s a negative connotation associated with short selling – the act of betting against a stock to perform well. But is this trading practice truly a bad thing?

In this episode of All Else Equal: Making Better Decisions, hosts and finance professors Jonathan Berk and Jules van Binsbergen build the case for short selling as a dynamic regulating force in the free market. And an incentive for individuals to investigate and expose fraud.

Later in the episode, Jonathan and Jules speak with Marc Cohodes, whose notable short-selling decisions have landed him in hot water with powerful figures all over the world. Cohodes has exposed a series of fraudulent practices – from mortgage lender Novastar to digital finance giant Wirecard, and most recently the cryptocurrency exchange FDX – and shares his view on the role of short sellers to step in where government regulation fails.

Submit your questions to the show here: https://bit.ly/AllElseEqual

Find All Else Equal on the web: https://www.gsb.stanford.edu/business-podcasts/all-else-equal-making-better-decisions

All Else Equal: Making Better Decisions Podcast is a production of Stanford Graduate School of Business and is produced by University FM.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

There’s a negative connotation associated with short selling – the act of betting against a stock to perform well. But is this trading practice truly a bad thing?

Submit your questions to the show here: https://bit.ly/AllElseEqual

Find All Else Equal on the web: https://www.gsb.stanford.edu/business-podcasts/all-else-equal-making-better-decisions

All Else Equal: Making Better Decisions Podcast is a production of Stanford Graduate School of Business and is produced by University FM.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Previous Episode

Ep16 “The Value Of Protecting Unpleasant Speech” with John Paulson

Freedom of expression is a constitutional right, but it’s also a valuable business strategy.

In this episode of All Else Equal: Making Better Decisions, hosts and finance professors Jonathan Berk and Jules van Binsbergen build the case that without freedom of expression within an organization, the competitiveness of the organization will suffer and ultimately be much worse off without a culture that allows for dissenting opinions.

Later in the episode, Jonathan and Jules speak with John Paulson – whose outside-the-box thinking allowed him to predict the 2008 mortgage crisis before almost anyone else, and to position himself and his clients to gain financially. Paulson’s decision to short mortgage bonds was the subject of Michael Lewis’ book “The Big Short” and a blockbuster film of the same name.

Submit your questions to the show here: https://bit.ly/AllElseEqual

Find All Else Equal on the web: https://www.gsb.stanford.edu/business-podcasts/all-else-equal-making-better-decisions

All Else Equal: Making Better Decisions Podcast is a production of Stanford Graduate School of Business and is produced by University FM.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Next Episode

Ep18 “Investigating Implausible Theories” with John Ioannidis

In science, we often hear about new discoveries or theories that could change our way of thinking. In the business world, a start-up might promise a revolution in a specific industry, if it can get the right investments. So, when is it worth believing or betting on one of these new theories, and when is it a waste of time? In this episode of All Else Equal, Jules and Jonathan discuss how we can all use the principle of Occam’s Razor (the idea that the simplest theory is often the correct one) in many different areas of our life.

Helping them explain the real world practice of this is John Ioannidis, a professor of Medicine and Epidemiology at Stanford University. John was the first academic to question the practices of Theranos, the company co-founded by Elizabeth Holmes that claimed it would change medicine with its new method of testing blood. He criticized the lack of peer reviewed research of the company’s methods, while at the same time investors were making it a billion dollar company. John tells Jules and Jonathan about this experience, as well as how Occam’s Razor comes into play with a lot of scientific research.

Submit your questions to the show here: https://bit.ly/AllElseEqual

Find All Else Equal on the web: https://www.gsb.stanford.edu/business-podcasts/all-else-equal-making-better-decisions

All Else Equal: Making Better Decisions Podcast is a production of Stanford Graduate School of Business and is produced by University FM.

See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.