On March 7, 2016, Fortune Magazine covered several successful firms who have had a hand in exposing US-based Chinese companies suspected of engaging in fraudulent activities. Dan David, co-founder of GeoInvesting, was interviewed by Fortune so they could gain more perspective on navigating the circumstances that arise from these situations.
Fortune Speaks with GeoInvesting Co-founder Dan David
…GeoInvesting, ranked 17th, started shorting small Chinese companies it suspected were fraudulent in 2011. It has made 46 short calls since then, and the company says that a portfolio based on its picks would have had annualized returns of 56%….
…In one sense, today’s short-selling successes may have been inevitable. Even bullish investors have recently fretted that stocks worldwide were overpriced and due for a correction; early this year, the shares of good companies and shaky ones alike got clobbered. The next time the broader market is on an upswing, the gap between the shorts’ pessimism and conventional wisdom will widen once more–and their emotional mettle will be tested. “It’s a business where you bang your head against the wall every single day,” says Dan David. “You age.”…
You can read the full article here.