Episode #262: Ihor Dusaniwsky, S3 Partners, “When People Say ‘Shorts Only Kill The Stock Price’…No…There’s A Two Way Street In Their Activity”
Guest: Ihor Dusaniwsky is the Managing Director of Predictive Analytics for S3 Partners, a financial analytics firm focused on delivering real-time, unbiased stock loan data to investors. He was previously a Vice President with Commerzbank AG and the Head of Agency Lending Desk for Morgan Stanley. He received his Bachelor’s degree from NYU.
Date Recorded: 9/30/2020 | Run-Time: 58:31
Summary: In today’s episode, we’re chatting all things short-selling. If you are managing money on behalf of others, or even for your own account and don’t know if you are earning money, or even how much, from lending your securities, this is a must listen.
We cover the mechanics of short selling, that is, what actually happens when someone sells short a security. Ihor has said Tesla is the longest unprofitable short he’s ever seen. We chat Tesla and its status as the number-one short in the market right now by absolute size. We get into S3, and the unique, and frankly refreshing offering of providing timely, unbiased, stock loan data to investors.
As we wind down, we cover some of Ihor’s lessons and takeaways from his time analyzing short interest data.
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Links from the Episode:
- 0:40 – Intro
- 1:46 – Welcome to our guest, Ihor Dusaniwsky
- 3:24 – Mechanics of short selling
- 5:32 – Shorting Tesla
- 7:00 – What is Short Interest
- 8:35 – Why shorts are not inherently bad
- 8:42 – The Meb Faber Show – Episode #125: Tom Barton, “The Biggest Problem Investors Have is Things Change…and They Don’t Change”
- 11:26 – Ways to use shorts
- 13:39 – Short lending to the longs
- 16:45 – How loan rates vary
- 19:21 – Collateral used for shorts
- 21:16 – Why isn’t it a guaranteed income source
- 22:52 – The difficulty in getting the stock data to effectively short
- 25:41 – Sharing revenue with investment clients
- 27:43 – Finding advisors that are on your side
- 32:11 – How ETFs have impacted the market in his view
- 35:00 – Short lending on client portfolios
- 35:53 – Getting information on stock borrow rates
- 38:18 – Client breakdown for S3
- 39:17 – Ideas they are focused on right now at Shortsight
- 39:32 – Short Interest % of Float 2.0 (Dusaniwsky)
- 41:41 – Good and bad ways to use their data
- 43:26 – Invest With The House: Hacking The Top Hedge Funds (Faber)
- 44:14 – Battle ground stocks that stand out
- 47:00 – Batting average for short sellers
- 50:58 – Lessons learned or ways Ihor has changed his thinking over the years
- 52:25 – How the pandemic impacted the short sellers
- 53:38 – Short selling outside the US
- 55:36 – Most memorable investment
- 56:40 – Connect with Ihor: twitter @ihors3, Shortsight, Black App
Transcript of Episode 262:
Welcome Message: Welcome to the Meb Faber Show, where the focus is on helping you grow and preserve your wealth. Join us as we discuss the craft of investing and uncover new and profitable ideas, all to help you grow wealthier and wiser. Better investing starts here.
Disclaimer: Meb Faber is the co-founder and Chief Investment Officer at Cambria Investment Management. Due to industry regulations, he will not discuss any of Cambria’s funds on this podcast. All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of Cambria Investment Management or its affiliates. For more information, visit cambriainvestments.com.
Meb: Hello friends. We got a fascinating show for you today. Our guest is managing director at S3 Partners, a firm focused on delivering real-time info on short selling, unbiased stock loan data to investors. In today’s episode we’re chatting shorts. We cover the mechanics of short selling. That is what actually happens when someone sells short a security. We chat Tesla, of course, and its status as the number one short in the market right now by absolute size. Our guest says Tesla is the longest most unprofitable short he’s ever seen. We get into S3 and the unique and frankly refreshing offering of providing timely, unbiased stock loan data to investors. If you’re managing money on behalf of others, or even for your own account, and you don’t know if you’re earning money, or even how much from lending your securities, this is a must listen. We talk about how short lending often provides income that makes an ETF not just low cost, but actually pays you to own it. As we wind down, we cover some of our guest’s lessons and takeaways from his time analysing short interest data. Please enjoy this episode with S3’s Ihor Dusaniwsky.
Ihor, welcome to the show.
Ihor: Thank you. Great to be here. Thanks for having me.
Meb: Where is here, New York?
Ihor: New York, Long Island, actually, at the moment. Working out of our offices in New York City, but right now we’re in Long Island during the pandemic.
Meb: Well, this is being recorded on the last day of the quarter. I can’t believe it, we still have three months left, in this year, 2020. We’ll see what the final quarter brings us. Today we’re going to talk about all things short selling, one of my favourite topics and something we haven’t talked about that much on the podcast. Before we get deep into shorting and all that stuff, give me the 1-minute overview of background, what kind of led you to the formation of S3, what was the path?
Ihor: I started out in controllers at Morgan Stanley, 30 years ago. I worked in New York, Tokyo, London, Hong Kong at Morgan Stanley. Got into securities finance around 20, 25 years ago now, and worked on the sell side. So after a while of being on the sell side, I thought I want to see the other side of the market, and Bob Sloan created this company, S3 Partners, to be a outsourced securities finance desk for the buy side. That’s why I joined. I was one of the first people to join the firm in 2003, where we kind of evolved from just being a outsourced finance desk to using our FinTech products, our systems to be a data and technology company. Now we supply data and information for both the buy and sell side but predominantly on the buy side for securities finance, and pricing in the market.
Meb: Great. So you’re one of my favourite followers on Twitter on this topic.
Ihor: Oh, thank you.
Meb: I’m going to link to your handle online. I mean, shorting is an area that I think many people, particularly the media are enamoured with. I also don’t feel like a lot of people really understand the basics and the mechanics. Could you give us just a kind of 101 level overview of the short selling process, and what’s involved?
Ihor: It’s surprising to me that actually most of the retail side doesn’t have a great handle on the process. Probably a lot of institutional guys know how to do a short sell but really don’t know the nitty-gritty of how it works. I mean, basically, you’re looking to short a stock that you think the price is going down as either a hedge or an alpha play. You’re going to your broker or prime broker and you’re getting a locate because every short sale has to have a stock borrow, because you’re delivering out shares to someone. So the broker said, “Yes, I can do this. I can lend you the stock.” So if you are trying to borrow Apple, Microsoft, Tesla, or whatever, it’s usually a pretty easy borrow, and it’s pretty cheap. A normal borrow cost for what we call general collateral, GC stock, is around 30 basis points per year. So it’s not a big drain on your alpha expectations. Then you’ve got stocks that are much more expensive, like a Nikola or a GameStop which can run at times over 100%, so you better be right and you better be right pretty quick. Because that’s one thing that I think a lot of investors don’t realize is, hey, I’ve made a 20% return on my short play, but it cost me 18% in financing costs. So what was a good trade is really not.
Meb: I think that’s a great overview. The challenging, and the position sizing, and so many things go into short selling that make it…a lot of people want to think it’s just the opposite of going long, and it’s really not, for a lot of reasons. One of the ones, which is the short sellers’ dreaded short squeeze very quickly can turn into a painful sort of experience from someone who grew up retail shorting, but being on the institutional side of it now.
All right, so I think that’s a pretty good overview. What else? You talk about GameStop, you talk about Tesla. Tesla, I feel like is the use case that everyone wants to talk about. Could you give us maybe just like a walkthrough a little bit about an overview of shorting? I think at one point, you called Tesla the most unprofitable short I’ve ever seen. I think this was pre-2020. Maybe just talk to us a little bit about shorting within the context of Tesla.
Ihor: That’s funny, because I just was looking up some numbers on Tesla recently. I found that although our data only goes back some 6, 8 years, on a stock by stock, day by day level, I went back and estimated P&L, it looks like since 2010, Tesla shorts are down around $42 billion in mark-to-market losses. Now, some of that is offset by convertible bonds, options, and such. If you’re looking at your P&L, on the equity side, they’re down around $42 billion. They’re still in it. Tesla is still the number one short in the market. It’s by far, the short sellers are still holding on to their positions. It’s the tough long short. It’s just every day is a new story for Tesla.
Meb: You touched on a couple points. One is when you talk about the largest short, do you mean absolute size, not as a percentage of the float?
Meb: Maybe use that as a jumping off point to talk about what’s short interest, and what all that means.
Ihor: This is always kind of something I talk to people about. There’s a little misnomer in what metric to use when you’re looking at a short. So if you’re looking at a small cap name, it’s got 45% short interest percentage of float, great, that’s $40 million. So it’s not really a big positional short, in the world, in the U.S. market, where you’ve got something like Tesla, which has only got 7%, [inaudible 00:07:30] short interest as a percentage of float, is $24 billion of short interest. So you’ve got most big institutions have some sort of exposure to Tesla one way or another, either on the long side or in the short side. It’s a play that just keeps going up and down. Number two is Alibaba with $11 billion and Apple with $9 billion. So it’s by far the most popular short in the market. Short interest percentage of float is an interesting metric, we actually have kind of augmented that a bit, which I’ll talk about later. When you’re looking at comparisons to one of the big shorts, look at notional short and short value. No one really cares how many chips you put up on the poker table when you bet, you really want to know what the colour of those chips are. So if someone’s throwing out a $100 chip, it’s a bigger bet than someone throwing out $5 chips.
Meb: It’s funny, as we’re on the topic of Tesla, as I just looked it up, it reminded me I had an exchange with Elon in 2018 on Twitter. I’ll just read you the highlights real quick because it’s kind of funny, and I think illustrative of how I think about shorting. We had an old school short seller, Tom Barton on the podcast, who goes back decades. He had exposed a lot of frauds and scams, predatory, and this is one of the key benefits of having shorts is the sort of forensic ability. Elon had tweeted, he said, what the shorts do should be illegal. I said, “Look, I love Elon and Tesla but this is backwards. Not all shorts are bad, not all longs are good. People have incentive to kind of talk their book.” Elon started talking about, he said, “Shorting apply to the market of holds, obviously a net negative, and in a sense negative GDP. It stops private companies from going public.” He gets in all these sort of like weird arguments. Basically, I came into it and said, “Look, there’s a lot of good, fun companies that do short lending and return it to shareholders. So in cases, that is a great benefit to the shareholders.” I said, “At the end of the day it’s like if you just execute as a company, you don’t have to worry about what all these shorts are doing because they’ll eventually get lit on fire.” Any general thoughts?
Ihor: One thing that people look at is short interest, and say, “Oh, my God, that’s got a big short interest.” Well, if someone executes a short, their effect on the market is, God, it’s finished. It’s just like the long shareholder who bought 100 shares and lured it from $50 bucks to $70 bucks. He’s not affecting the price in the market, just he’s holding his stock long. The same thing with a short seller, once they executed their short sale, they’re not affecting the stock price. What they are, is they have dry powder, they’re a potential buy. So when a short seller, whether he’s making money or losing money, eventually he’s got to close down his position. So he is a potential buy in the market. We talk to a lot of long shareholders, long side mutual funds, long-only guys, they want to know what the shorts are doing. Why? Because if a short is closing down his position, if all of a sudden, we’re seeing shorts are dropping from 600 million to 500 million. It’s like, “Wow, shorts are getting out.” This is putting upward pressure on the stock price. So when people say, oh, shorts only kill the stock price. No, there is a two-way street in their activity.
Remember, there’s a lot of short activity that uses hedging. You’re hedging your portfolio. You’re hedging your options. You’re hedging your convertible bonds. So it has a use, not just as pure alpha, it’s an awesome way to trade. Short sellers are also looking for momentum. So if I’m a momentum trader, I’m trading with one hand tied behind my back, if I’m only buying stock, because I’ve seen run-ups in the stock, and I go, “Wow, hit the top.” Well, a smart trader, and a good trader, should be saying, “Close up my long, initiate a short. Let’s make some money on the downside.” Run that down. Close that up. I mean, you can make a ton of money just by riding the waves of a stock as a momentum player. That’s what we’re seeing in the market now.
Meb: Tell me a little more about the landscape of how people are using short selling. You touched on it briefly. The first thing is everyone just assumes shorts, it’s going down. That’s my bet. In reality, it’s often market neutral. There’s a long short. There’s short against the… I mean, there’s a million different ways that people kind of… Any other general thoughts on kind of…because you probably get a chat with all types of the buy side.
Ihor: Yes, exactly. I mean, you get a lot of analysts who are looking at a sector, so you’re picking any sector, semiconductors, whatever it is, automobiles, and you’re saying, best-of-breed, worse-of-breed. Now you did all this work, and I’m looking at 40 names. Well, I can actually buy the best, and I’m looking at and saying, this is the best stock in the sector, buy that one. This is the worst stock in the sector, so you have the underperformers. Well, instead of just buying the best, let me leverage up my position but buy the best, short the worst. Now I can do my trades, I’ve got leverage, I can do it 1, 2, 3, 4, 5 times. I can actually augment my P&L by making slightly less because I’ve got a net offset, but I’m doing it 5 times so I’m making more on a gross. So it’s allowing me to use my money more efficiently and put out bigger bets by using other people’s money, the prime brokers.
Now, again, you got to be able to manage your position. There’s a lot more complexity in this. It allows you to kind of put on bigger bets and put on bets that are a little more wide ranging in t sector. You’re kind of saying, this is better, this is worse for the time being. Well, I want to offset this long with this short, because I’m kind of managing my risk exposure. It becomes more of a not just an alpha play, not just a play to make money. It’s also a way to protect your portfolio. If I’m long on a whole bunch of tech stock, you know what? Maybe I’d be shorting the QQQs. Or if I’m thinking that there’s some sort of a QQQ ETF, which is a NASDAQ ETF, I’m looking to give myself some downside. I know I love these 12 stocks. You know what? The sector might have some issues with. So you know what, let me go short the sector because there might be some problems overall, but these 5, or 6, or 10 stocks are going to way outperform. That’s how the shorting of the ETF helps you manage your risk and give you better performance overall.
Meb: I want to talk one more minute about this concept of the short lending for the longs. As you mentioned, in some cases, it’s basis points. In some cases, it’s dozens, if not hundreds of basis points to the fund shareholders in the vast majority. I mean, if it’s not 70%, it’s 90% of end investors are unaware of this process, and how much it could benefit the end investor. Do you have any general thoughts on the lay of the land on the industry? Does everyone do it? Only the good guys do it? A lot of people just keep it from the long book of people lending it out. How are people kind of going about it?
Ihor: That’s one of the reasons why we have a lot of long-only investors using our platform. We’re actually helping them manage their book on the stock lending side. So a guy who is a great stock picker or has his big portfolio of maybe a sector that they’re long in a particular mutual fund, or ETF has no clue what stock is hot or cold with the stock loan market. If you’re long GameStop, well, it’s criminal that you’re not making 100% return for your investors. It’s a huge amount of money. What we see is that most of the big guys do lend, most of them do pay back to investors. There are some that don’t. Again, that’s specific to each of the fund manager.
There are still a good amount of ETFs and long-only guys that don’t lend at all. They always give us the, I don’t want to hurt my positions by helping the shorts. The problem is, is that his incremental loan is not going to be affecting stock price that much. Basically, if I’m not borrowing from your portfolio, I’m borrowing from someone else’s. It’s not like you’re stopping the short from doing his damage or in his trade. He’s borrowing it from somewhere else. So why shouldn’t you and your investors make some money in there. You’re right, for the most part, you look at a portfolio of S&P 500 names, your return is like 30 to 50 basis points. It’s still, when you’re talking about on an average basis, the S&P returning 68% a year, if I can knock on an extra 50%, 50 basis points to that total, now, you’ve just jumped quintile in your rankings, because you’re lending the stock. Therefore, pension fund or investment for something like that, that makes a difference in their returns.
Meb: It can make a big difference in a world where we are today, which is, so many investors focus almost exclusively on expense ratio. We tell a lot of people, we say in many cases, you can have actual ETFs or funds that have a higher short lending revenue than the expense ratio.
Meb: So in my mind, for all intents and purposes, you have a negative expense ratio, which means you are being paid on this fund. That usually blows people’s minds. It’s like, does not compute. It’s just something where people are like, what?
Ihor: Not to take advantage of stock lending is really doing a disservice. You know what? You can get some home runs. I mean, there are some stocks, like you said, 10%, 15%, 20% for a good amount of time. Also, you’re not just covering expenses, you’re creating alpha.
Meb: How much does the loan rate vary? I mean, is this like a day-to-day thing? Is this like, that’s pretty stable? Does it vary? The example you were using is GameStop, or even something like an Apple or a Tesla. Is that something that changes not really from month-to-month, or changes a lot day-to-day?
Ihor: In general, there are some 12,000, 15,000 shorts in the U.S. market. Most of the names are really small, have small short interest, but on average, the average stock borrow fees were up 70 basis points for everything. Then you’ve got the GC which is 30 basis points. So the interesting thing about stock borrowing, it’s not a linear increase of rates, it’s exponential. So basically, everything is a GC, 30 basis points, until it’s not. You might go through over 90% of the stocks are GC, are easy to borrow, your Apple’s, your Exxon’s, all the easy names.
Now, you get this inflection point where utilization, where usage of whatever stock that’s available to borrow gets to a point where rates go up. Then things go up really in an exponential way, where you go from 0 to 30 basis points to 1, to 5, to 10, 20 to 50. There’s not many stocks getting that far into that curve. When they do, rates go up a lot. So like I said, over 90% is going to stay around GC, 30 to 50 basis points, then you’ve got probably another 5% to 8% of the stocks are going in that 1% to 5%. Then the rates change on a daily basis. So basically, if I’m going out there to stock one guy, I’m shopping 3 to 4 not only rate, but I’m also shopping for quality of borrow. So if I know that you have a fund that sells the hell out of its churns expense book all the time, and so it’s in and out of stock, well, for me to borrow your stock, you have to give me a better rate, because I might have to replace that stock borrow pretty soon. If I’m talking to a pension fund that basically hold the stock for 20 years, because they’re not sellers, they’re just accumulators, well, then I’m going to pay a higher rate to borrow his stock. It kind of keeps going…that balance keeps going up and down. The lender’s job is to kind of make sure that they get the best rate possible.
So it’s kind of like an auto dealer that says, hey, this is the last red Corvette on the lot, you better buy it now. It’s going to cost you $20 grand over MSRP because it’s the last one. Well, the thing is, he’s got 20 other cars in his back lot but he’s trying to make you think that there’s not many cars out there to buy. So as a lender, he’s trying to increase his borrow rates, as a borrower I’m trying to shop the street to get as cheap as possible for my short selling. So it’s always this market dynamic in that stock loan.
Meb: A lot of people unfamiliar to the area get concerned because they say, well, there’s risk involved. The short seller may go bankrupt and blow up their fund and never return the fund. Walk us through how that actually works with posting collateral. What’s the typical sort of ballpark collateral today that people ask for?
Ihor: It’s a great point because people are scared because they hear these stories about stock loan blowing up a fund and now they’re short of cash and they’ve got to close up, or really, show a big loss. Number one, there’s no real losses on the stock loan side of the transaction. Every transaction that has a stock loan is mark-to-market daily, there’s 102% to 105% collateral. So if I’m borrowing $100 worth of Tesla, I’m putting up $102 worth of cash, and the lender holds on to that cash, he takes that cash and reinvests. Now, that’s where the issue is, where do you reinvest your cash? That’s where the risk is. That’s where the lender has to take care of, but it has nothing to do with the specific stock loan transaction. So if on a daily basis, if my stock price goes up, I got to put up my collateral. If my stock price goes down, I get collateral back. That cash exchange happens every day. It basically keeps the lender safe and keeps them solvent.
What other lenders do is they also minimize their risk by minimizing their allocation and their concentration to various categories. So if I’m a lender, I’m not lending all my stock to one prime broker, or one short, one hedge fund. I’m saying, hey, my systems are smart enough to say, I’m only lending out 40%, or 30%, or 50% of my any particular name to any one user. So I’m spreading my kind of point here. So it’s not just risk of mark-to-market prices, [inaudible 00:21:05] having taken care of by spreading out your positions. If one hedge fund wants another hedge fund once a week, it’s easy to spread out your risk.
Meb: I imagine a lot of people listening would say, why wouldn’t I just go and buy the top 10 or 20 most shorted stocks and lend them out even if it was 10% revenue? That would be a pretty good revenue. Any general thoughts on that? Why isn’t it that easy? Why doesn’t it work like that?
Ihor: Well, the biggest prime brokers do that all day long. What you’re doing is you’re going long, the biggest most expensive stock borrows. You’re hedging them out using your options, or ETFs, or swaps. You’re kind of hedging some of your risk and you’re just earning that stock borrow fee. That’s if you’re able to do that, because most of the street is not really educated in what the fee is. So if a option writer doesn’t realize that he’s erred in his calculation, it should be over 100% because that’s what the stock borrow fee is. He’s pricing it using 50, 60, 40, whatever way it is, he’s under-pricing his option. So as a broker, or as an investor who’s really adept, and kind of looks at the market, you go, “Holy crap, I can actually buy this stock, lend it out for 100, buy an option to hedge myself, I got no risk on the price. I’m making a net 30%, 40% return for the duration of my option.” So yeah, it happens. We have clients who do that. There are prime brokers that do that all day long. There’s a lot of money to be made.
Meb: One of the biggest challenges as a client, I spent years ago, trying to model out the various impacts of strategies that involve shorting stocks. One of the biggest challenges you see in a lot of the short academic literature and implementation is, to me, it’s not necessarily that grounded in reality, potentially, because it’s so hard to find the stock data, and it changes so frequently. Then it’s fragmented. It doesn’t go back that far. All these things…I mean, I was trying to come up with all these different strategies. I’m like, how do these people make all these assumptions? Because that’s not probably what it looked like in the past?
Ihor: Yeah, this is your Econ 101 where your professor says, well, assume a risk-free trade with no transaction costs and automatic execution at the perfect bid-ask? It’s complete garbage, because unless you have this data, you really can’t make those kind of… A lot of the things that I see in these papers don’t really work in real life. It’s a great idea. It makes kind of sense in an educated ivory towers. When you’re out there hitting the bid, that’s not exactly the way the market works. We actually are starting to give our data out to some academics to use in their reports, and their research. We do have daily data, they come in and they see our data, and they go, “Holy crap, actually I’ve never been able to see this before.” So yeah, our algo calculates intraday short interest and even your daily data, and I go out, we have a stock on desk, and that goes out to the street.
So I’m pinging the street to see what the rate is on Nikola, and the rate is on GameStop. So I’m not just getting feeds or whatever. We’re actually seeing what the true market is. We’re adjusting our system to say, yeah, rate on existing trends on GameStop is 55%. We’re seeing new borrows at 100% to 150%. So we’re telling you what the incremental piece is as well as the existing cost. That’s something that maybe short sellers really don’t understand is that stock loan rates are very, very sticky. They go up slowly, they go down slowly. If you own a share of IBM, everyone’s getting the same price of IBM at 401. Stock loan, one guy’s getting charged 50%, another guy is getting charged 25%, another guy is getting charged 150%. All are fair and good rates because it depends on when you got on the position, how big your position is, and where your position is sitting.
If you’re at a shitty broker, that’s charging you a huge bid on their side to borrow the stock, and you got in late to the train, you’re paying 150%. If you’re at a good prime broker, if you’re the good client at the prime broker, your position is not huge, but if it’s a big, steady position you had on, you’re probably only going to charge 50%. So there’s a huge variability between rates.
Meb: We’re chatting mostly about the institutional world. I had a tweet the other day…this is getting a little off-topic. So we’ll come back to topic, but this is a normal conversation with me. I said, if you think about the traditional retail brokerages, there’s like four main ways traditionally they made money, one was commissions which are for the most part gone. One is interest spread on cash balances. Your money is in cash at 0, they invested at a higher amount. That’s a big one for places like Schwab. The other two, there’s short lending revenue, and also payment for order flow. I was curious, I said, I wonder…it’s very one-off bespoke and traditionally focused only on high-net worth. I said, I wonder if you’ll see any brokerages develop that offer to share part of that revenue with the end investor. Is that something you think is possible, improbable? Likely? None of the above?
Ihor: It’s actually happening, shockingly, because some of the big retail brokers actually have an internal stock loan desk, which is sharing revenues with their clients. The catch is they’re not offering, necessarily, you have to ask for it. So if you don’t know that GameStop is doing 50% to 100% fee, then I’d say, “Hey, take some of my revenues.” If I go to King, they might say, “Hey, I got a fully paid-for account, let me open up a stock loan agreement with you because there’s a lot of technicalities in lending stock.” And say, “Hey, take my GameStop.” And say, “You look great, we’ll pay you 45 out of the 50,” or whatever, “and you’re going to earn some income.” What they will do though, if they see an expensive stock that they really need, then they’ll go knock on your door. So if I need Nikola stock because I got a lot of people looking to short and I can’t get my hands on stock. They’ll start knocking on these long shareholders’ door, and they’d say, “Hey, you know what, guess what? I can make you 15% return if you lend me your Nikola stock.” Then you’ll get this action on the stock loan stuff.
Meb: What’s Nikola going? What’s the rate ballpark right now?
Ihor: Nikola, it’s a lot less, it’s around 10-ish now. It’s come down quite a bit.
Meb: It’s interesting. I was laughing so hard when all the retail brokerages started to go commission free, I don’t know, was that this year? This year or last year, I can’t remember.
Ihor: Basically, last year. Yeah.
Meb: Charles Schwab came out and look, they’ve been a industry pioneer, but I’m going to give them a little shit here, because he came out in public. He’s like, “I’ve always hated commissions. I want them to go away.” I’m like, “Oh, really, you’ve charged them for 40 years, and just now just because everyone else went to 0, you’re finding religion. Come on?” So this is sort of a similar concept, I’m thinking in my head, where no one is going to do it until their hand is forced. It seems like you could come up with a brokerage that says, look, you pay us a certain fee, whatever it may be, basis point or percentage of, but if you framed it as yield, or say, look, you’re going to potentially get this much yield on your account. Because if we do all these things, we share in the payment for order flow, we share in the stock lending. Anyway, someone listening, take the idea and run with it. I don’t want to do it, too much work.
Ihor: No, you’re right, there is a lot of cash…people don’t understand how much cash flow there is in a brokerage account, the different ways that brokers make money or cost you money. When you’re going out and taking that cash and you’re reinvesting in a certain…you’re lending it to other clients that have had a thing. You’re taking the stock, and you’re lending that. I remember one time…again, I know the market shows, we can’t invest in stocks, because we see too much data so we can do ETFs. We have a holding period for the ETFs. So I saw a long, short-short play in some fixed-income ETF trade, I want to go longer with some of the longer yield ETFs, you go shorter with one of the shorter yield ETFs. So I put the trade on.
I know that the rate was around 1%, 1.5% percent, so I get my brokerage report. This is what retail investors should really understand. Find where the stock loan costs are in your brokerage report. It’s buried. It’s hidden. It’s in a column that you really don’t see. I’m looking I see this 7% cost. I’m like, what the hell is that? So I dug through a little further, and the things I saw, “Oh my God, you short me 7% for the stock borrow, that I know is going for a point, a point and a half.” So I called up my broker and I said, “All right, what’s going on?” “I don’t know. That’s the rate.” I go, “Listen, I trade with your guy that lends you the stock.” I said, “Let me call Mike and tell him that I will get him the stock.” So he’s replacing [inaudible 00:29:46], “No, we can’t do that.” At one point they were charging 600 basis points spread on the stock borrow. Now it’s kind of turning around where they’re not doing that because the noise and the knowledge is already there where the shorts are finally starting to…or even long shareholders, are finally starting to realize the assets they’re holding.
I love it when I…I already mentioned my Twitter feed. I’ll mention to a couple of my Twitter guys, and they’ll come back to me and say, “Oh, I’m making 3% on the stock that I never knew I could make.” I said, yeah, good for you, and you’re taking advantage of what the market really is.
Meb: This is the whole key on everything involving Wall Street and our world is you have to find a partnership where the interests are aligned and where people are on the same side. Giving Schwab crap, but they have an offering that’s a fiduciary offering their robo-adviser that intentionally puts people in a huge cash slug paying essentially, it’s like, I don’t think it was 100 basis points lower than it could have been. It’s close. I made the argument, I was like, can you be a fiduciary and do that? I don’t think you can. Anyway, find you someone who is on your same side in every aspect of not just finance but the world.
Ihor: It’s a big deal. When you talk about making sure that you know what’s going on. Stock loan can either turn a trade into a winner or a loser because of the cost. So if you’re a long stock that’s already 3% but you can make 10% on the stock loan side, hey, you know what? I might want to stay in that stock. So it’s a big investment decision.
Meb: It’s like you need to think about the things that people consider particularly on the retail, even professional advisors, one of the challenges, there’s not that much info and it’s also a backward looking for funds, you can put in, I think the prospectus or annual report on how much revenue you got from the stock loan. Obviously, it’s not going to be the same going forward, it’d be nice to see Morningstar start to incorporate some of those, or some of these fund websites incorporate the amount, because it’s often far more significant than the expense ratio.
While we’re on the topic of ETFs and funds, any general takeaways, trends, how things have been going? Have they changed the game, by the baskets and the passive, over the last decade or so, any general thoughts there?
Ihor: On ETFs, what I do know is that the stock loan has become a bigger portion of their activities. We have a lot of guys on the ETF side that are actively lending. I think they’re actually making some investment decisions on some of their long-only positions based on what they can get in the market. So if I’m torn between holding a couple of names, even whether it’s a bond or an equity, and I can make an extra couple of points on the financing side, that affects their decisions now. What we do is we give ETFs and long-only guys the insight into what their portfolio is making. So like you said, it can cover expenses, add to their alpha. It’s funny, because on the short side, we’re seeing people trading ETFs. Actually, I’m seeing less activity than some of the like ETFs that have higher stock borrow fees. So I mean, in this world, there are so many ETFs that are so close in performance and holdings. I’ll actually see some of the more expensive stock borrow ETFs on the short side go down, and a like one go up, and I’m wondering what’s going on. I realize that some smart investor who realized, hey, why am I shorting this one? This S&P 500 ETF I’m paying 80 basis points whereas I may short this one for 30. So it’s not only just management fees, it’s also stock borrow fees on the short side that matter.
Meb: We have a good friend, Corey Hoffstein, who once jokingly years ago said there was a particular corporate bond ETF, Maven J&K, but it’s sort of irrelevant, and this was a while back. There was a pretty high stock borrow on J&K. And in tongue in cheek he says I’m going to launch a new ETF. All it does is own J&K and lends it out, and it’s going to have a higher return than buying J&K. I was like this is some sort of like Russian doll.
Ihor: Yes. That is so true.
Meb: The math works out. He said I can make a spread. I thought that was really funny. It’s really interesting you point this out because the considerations people put into picking a fund and, like you mentioned, there’s so many that even if they have different indexes or approaches are essentially the same fund. This has been going on with active mutual funds for decades, where they’re kind of close index versions of each other. So the thing that everyone looks at was expense ratio, maybe they look at trading market impact or the bid-ask and liquidity, but the next one being the short lending revenue could be bigger than both. Taxes, of course, some people think about taxes, but it’ll be interesting to see much more of the trade optimization by allocators based on that concept.
I actually don’t know…this is a good question and maybe you know more than I do, do most investment advisors, so RIAs, financial planners at Morgan, Merrill wirehouses, plus all the independents, I don’t think they do short lending on the majority of client portfolios by default, either. Do you know?
Ihor: Yeah, back in the day what we used to do is we would actually contact these guys, went over to the Morgan Stanley stock borrow guys, we actually call them up and say, hey…we look at the big holders of a stock and say, “Hey, your guy owns this.” We find out who the RIA was. We say, “Talk to him. Let’s see if I can borrow the stock.” I mean, you would hope that eventually, you’d have this, especially with the ease of information flow now that an investment advisor should have a screen that says, here’s the return on Apple, and here’s also the stock borrow revenue you can generate. So this way, at least they can help do their fiduciary responsibility, and lend out the stock.
Meb: So where do they go for that info? This could be a good transition into what you guys are up to at S3. If Joe E*TRADE wants to go find stock borrow rates, is there a accepted place to go? Is it pretty opaque? Is it impossible to find? What’s the sort of status quo?
Ihor: You can always call your broker, but again, that’s his viewpoint. So if you got a guy who has no book in his name, and is calling up and say, “Hey, what’s his rate?” He gets off-market or a still rate, what we have is a Black App, which is our most profitable, most active use on our system. You get it through Bloomberg and Refinitiv. We have a retail app that’s kind of scaled down version of that. Basically, you can put in your portfolio, and you can see what stock loan activity is and stock loan rates, live, real-time on your portfolio, or on your stocks. We have the stock loan desk, which is myself and a couple other guys at S3, that we have phone calls and emails all day long, from institutions and large individuals that say, hey, I’m long, Turtle Beach, and I hear that’s got some stock loan returns coming, what’s the rate today, so I can go back to my broker and make sure he’s paying me a fair amount?
So the Black App is a big sell for us. The clients love it because you can actually populate it with your own portfolio and manage your own book. You’ll see historical stock loan activity. You’ll see historical rates. You’ll see what’s going on in like securities, so if I’m a long one name, and I’m saying what would it be? What’s going on in the other names in the same sector or the same family of stocks? You can kind of check and see what the stock loan activity is on those.
Meb: You’re saying it’s called the Black App?
Ihor: Yeah, it’s called the Black App. It’s the number one retail selling app on Bloomberg. So it’s really got a lot of good traction there. We also provide the data. If you’re on Bloomberg, or Refinitiv, we provide data to [inaudible 00:37:30], we provide data to NASDAQ, the short sides will tell people what the short interest is, and what rates are in stocks. We’re trying to disseminate the information because it doesn’t exist anywhere. It doesn’t exist in a timely manner, or in a unbiased manner elsewhere. Like I said, we don’t hold positions, we don’t trade. We’re basically collecting data, normalizing it, using our algo to kind of get it cleaner and better. We spit it out to the market and say, hey, use this because it’s something that you need to do to make your investment strategies better.
Meb: What’s the most typical client breakdown for you guys? Is it buy side? Is it sell side? Is it short sellers? Is it data providers?
Ihor: It’s hedge funds. Hedge funds and long holding guys. So we first started out servicing the hedge fund industry, but ended up being a big provider to the long holdings, just because, like you nail it on the head, it’s an opaque market, and they were getting not the fair end of the stick with a lot of their revenues. These long side guys really like to see, number one, what kind of income they’re going to get. Number two, they want to know what the shorts are doing and their names. So if I’m a long at stock, and I’m seeing the shorts building position, maybe it’s time for me to take a look at that stock, and say, why are the shorts coming in hard? Is it time for me to get out or should I have to revisit my investment strategy? That’s been a big piece of our analytics is people want to see rotational moves. They want to see that, hey, the shorts are getting out of one sector, getting into another sector. Where are the moves? Everyone knows what the long side is doing, but not many people know what the short side is doing.
Meb: You guys put out a lot of pretty in-depth research, and for people that want to get in the weeds, we’ll post show note links to your website and some of these articles. Maybe touch on some of the ideas you guys are thinking about, excited about. You have a pretty fun article talking about short interest and better ways to think about that as a percentage of float. Any of those in general you want to talk about that you guys have been researching and thinking about?
Ihor: Yeah, that’s actually one of my little pet projects here. I kept getting questions about some ETFs that had over 100% short interest percentage of float, XRT was one of…there’s a handful of them, and a handful of stocks that also have higher than 100% short interest percentage of float. I couldn’t really… [inaudible 00:39:39] asked me, how is that possible? I go, well, there really isn’t. You can’t get 5 quarts of milk out of a gallon jug. It’s only so many stock borrows out there, so there’s no way to have 120% short interest percentage of float. So I sat back and said, why is that happening? Go back to my controller days and prime broker days, I was like, wait a minute, let me just do the flows of a transaction. I realized that every short creates a synthetic long.
So you as a beneficial owner, lending stock, and the short seller selling it, well, there’s someone buying that stock. So the beneficial owner is still longing the stock, the short seller is shorting the stock, and that new buyer is longing the stock. So in effect, you’ve got two long shares and one shorts here. Well, that long share can help you re-lend also. So that’s sitting in a prime brokerage margin account, or in a hedge fund that [inaudible 00:40:30]. So now the prime broker takes that one share, he can lend it out to another short seller, then another buyer buys that, so now you got three shares of stock instead of one. So it doesn’t change the market for the company itself. If they’re only paying out one dividend, you’re only getting one vote. In the middle, you’ve got three guys that actually have long exposure to this stock.
So what we’ve come up with is the S3 short interest percentage of float, which basically gives you really what the float is. So something like GameStop, where it’s not at over 100%, it’s actually 57%, which is more realistic, makes more sense. So we’re basically saying that it is float plus the synthetic longs, is really what the denominator in this [inaudible 00:41:14], not just the float.
Meb: That’s interesting.
Ihor: Yeah, it’s kind of giving people an idea of really, how many shares are really tradable in the market?
Meb: What are some of the ways that people use you all’s data, or just short data in general that you think is interesting. Under that same sort of questioning, any best practices, or do not use it this way because that’s really dumb. Just any general thoughts on how kind of people interpret or misinterpret some of the stuff y’all put out?
Ihor: Everyone’s a great buyer of stock, whether it really is or they think they are, but they’re good on the long side. Most people understand they’re not really good on the short side. Some people do, some people are good, some people are just kind of faking it and shorting whatever they hear. What we’re able to do is create idea generation for our funds and for our investors. If I give you a list of if you’re saying like semiconductors, or something really I’d like to short some names here, I don’t need to have a team of 60 analysts going through the semiconductor stocks, maybe I can just look at what the big movers in semiconductor short side is, and follow along. This market is no longer a pure value kind of play market. It’s really a momentum market for a lot of names. So why don’t I get on the wave?
So we have a lot of investors that are looking at the shortages action industry over the past week or past month and say, well, everyone’s shorting the hell out of this stock, why? Oh, that makes good sense. Let me get in. So I don’t have to have a 3D process where my analysts are trying to find the short. Other people have found it, right, let me just ride the momentum. So there’s a lot of momentum investing, which is the primary…it seems like the primary investing that’s going on in the market. Now, are you using our short side analytics to find the big momentum movers on the short side?
Meb: By piggybacking on these guys you don’t have to pay 2 and 20 either. That’s a big benefit.
Ihor: Yeah, that’s a big move.
Meb: I mean, we wrote a book on 13F investing on the long side and found that often, you could replicate the returns of a lot of these hedge funds. In some cases, the returns were actually better, because you weren’t paying that huge VIG on what they’re up to, obviously, on the long side, you can’t be trading that hyperactively otherwise it won’t show up in 13F. 13F’s maybe changing anyway, there’s a bunch of new SEC proposals. We’ll see what happens.
Ihor: Yeah, it’s interesting. Even on the ETF side, I was looking at fixed-income ETFs. By looking at where the shorts are going in and out of, I noticed that while the shorts are going into the high yield ETFs and actually covering the treasury ETF. So it’s like, wow, you can kind of get an idea what’s going on in the fixed-income market or in any sector just by seeing what the shorts are doing as well.
Meb: You’ve been commenting on this space for a while. Nothing really is more entertaining than the battleground stocks, in short selling. I mean, Tesla’s been like the case study in this over the past few years, and it’s resolved in a very dramatic way, at least for now. Then on the flip side, you have the Nikola. Any other stories that you can recall that are particularly memorable when it comes to the short world. I mean, whether it’s Volkswagen, or you can go way back, BRE-X. Anything that comes to mind as a way of also thinking about a case study of how this works out and plays out, all that good stuff?
Ihor: Yeah, I mean, recently had Wirecard, which was another big name that the shorts were in. It was again another Tesla, you had these long shareholders and loved the stock, and the short guys were coming in hard and heavy. There was a lot of writings and commentary that really the stock sucks and starts to pull out, and the longs come back and they say, you guys are idiots. It gets really vocal on both sides. Wirecard was one of the, again, recently played out where the shorts were right. The shortages were steady, surprisingly, I thought for a while there with all the commentary and the regulars coming in. I thought the shorts would acquiesce and kind of leave the trade and they didn’t. They ended up making a nice P&L on it, but they had to stay in and take it on the chin for a while.
Volkswagen, Porsche was just…that still gives me acid reflux. That was just nasty. It was quick. It was nasty. I was a mortgage seller at the time. It was just trade that happened so fast where the shorts got absolutely crushed. We were sitting there trying to borrow stock, trying to help sell the day basis, help the position settle, and get people out of the position, and you really couldn’t do anything, you were just sideswiped. You have to watch out. Besides that, you have recently had the leverage oil ETF DGAZF where shorts lost hundreds of millions of dollars, because the stock price went up to $15,000 a share in a couple of days. So if you weren’t able to get out of your trade, so I can see this retailer… Who’s trading leverage ETFs? Well, mostly it’s retail guys, you don’t see many of the monster hedge funds trading 3x leveraged ETFs.
So I was sitting back, and I go, “Oh, my God, these guys got obliterated. They’re going to come home. They’re getting a call from E*TRADE or Schwab and saying, ‘hi, you owe me $600 million in collateral on a $50,000 position.'” That was scary. I mean, it just goes to show you that you have to watch out on the short side because you can get killed. That’s such a one-off thing that’s…I don’t know how the exchanges let something like that happen.
Meb: Some of these stories give me sweaty palms, listening to the shorting has always been near and dear to my heart. I think it’s really hard, all my favourite short sellers, like the forensic accounting guys, they all have at least one, maybe two screws loose. They’re all just…and I say that in the most loving way possible, they’re all a little bit wonky. I think they do such a fantastic community service. My God, is it a hard job? They must have a high tolerance for pain. What do you think…can you make a generalization, but if you can’t, that’s fine? As far as looking at like high short interest or other indicators, the batting average of the shorts? Are they right a minority of the time? Are they right 90% of the time? Is it something that on the extreme examples, they’re often right? Any general thoughts?
Ihor: You know what the problem is, is that we’re an upward trending market for a long time. So the shorts got that going against them. They have two strikes on it right off the bat. So Buffett who said that, it doesn’t matter that you’re right, it matters whether the market thinks you’re right. So these guys might have the right idea. If you’ve got the crowd pushing a stock up, you’re going to lose money. So we do see a lot of names, a lot of short sellers who are wrong, just because right idea, market won’t look at reality. For the most part, I don’t think that most short sellers are profitable in a lot of their trades, because they’re not managing it right? I think that whereas a long seller is better at riding profits and cutting losses, we see a lot of positions in short sellers kind of holding on because they know their thesis is right, they know their conviction is right. So I think they hold losses. A lot of times, they’re right in the long term. In the meantime, they’ve taken a lot of mark-to-market losses, and a lot of red ink to their P&L.
If you look at Tesla, they’re up recently. So it’s a timing issue. It’s like, if you bought it a year ago, you’re getting crushed. If you bought it a month ago, you’re up. So short selling and timing is a big deal. You have to know where to get in and out of trades. A lot of even institutional and retail guys are great at buying stock. They’re not so great shorting it. It’s a craft, which takes some effort and some seasoning. I think that using something like our…and you need to have the information, that’s probably one of the biggest thing, you really need to have the information on a lot of short selling. So you need something like our system where, hey, this stock is getting shorted big time. Get a look at that research already, get a little bit of the momentum, run with that. I think you’ll become a better short seller. Don’t go against the tide.
Meb: I used to say and this is just an observation, I don’t know how accurate it is. I used to say, my belief is that most of the traditional long short equity guys use shorting as a PowerPoint justification for charging 2 and 20. I say many, at least in my experience as an allocator over the years, it’s not their strong suite. I personally would much rather have a dedicated short seller who’s lived through a handful of years because, like you mentioned, position sizing and risk management, it’s not just about being right. It’s about how you approach the portfolio that has enough scars front and back of their chest that they’ve somebody like a [inaudible 00:49:58], but then having the, you, Martin Gale, keep going up against the position. It’s a tough game.
Ihor: Kinds of short names, and they get run out. Short Zoom communications, you just get crushed, you get crushed quick. So if you’re not nimble, and say, wow, I guessed wrong, or I thought the rally was going to end, now I want to get in early and take the whole downside. Well, maybe you should wait and see the momentum down and then get into your short position. So it’s like, guys [inaudible 00:50:27], they’re down over a billion dollars this month, in mark-to-market P&L. So it’s a $3 billion dollar short down a billion dollars. So tough to explain.
Meb: From someone who’s had his fingers dirty with the data, probably more intimately than just about anyone out there, any other just kind of lessons learned over the past number of years? I’ll include under that umbrella lessons learned, anything you’ve particularly changed your opinion on over the number of years with thinking about shorting and the data?
Ihor: Probably the best short sellers that are on our platform that we know of, don’t spread out their risk too far. So you got to pick a handful of names that you’re really, really sure of, that you really can manage. I don’t see them putting on 70 names. They’re putting on 5, 10, 15 names, following that putting on a big chunk of P&L. So if you have conviction, follow your conviction. If there’s too many short names, which means [inaudible 00:51:24], it’s like if you spread out your assets too far, you’re just taking losses in a lot of names, and your two or three winners, profits in those two or three winners could eat them up.
The big thing I think now is I’m seeing is quickness in the market, totally different from before. Before it was a lot of best-in-breed, worse-in-breed trading, you’re doing sector rotations. Now it’s like I see short interest going up and down really, really fast in a lot of names. So people are going in and out and kind of chopping in saying, hey, this name, it’s got some weakness, let me short it for a while. Oh, look at that, that one’s going…that one’s getting weaker now, let me get out of this one and get into this one. So we’re seeing a lot more movement between names. It’s a quicker market in the shorts than I think it used to be.
Meb: Did sort of the volatility both down and then back up this year, did that affect a lot of the stock borrow or short landscape at all? Any general summaries of the first few quarters of 2020?
Ihor: With the bottom end of March, we saw some short selling into that, not as much as I thought. I thought they’d be much more shorting into that drop. I think people on the short side or at least hedge funds or institutions, were looking for a floor quicker than it actually happened. So I didn’t see as much new short selling during that March weakness. Again, on the upside I sought some short covering. Again, I think people were kind of holding on to their positions and kind of saying, okay, this is going to come back. What we’re seeing now, within the last month, I’m seeing a lot of short covering. So it seems like the market we’re on the short side and saying that the downside is over or it’s kind of flattening out, and we’re ready for an upturn, which kind of surprised me. We had an election. I thought that the shorts would be piling on a little bit more. We’re seeing some significant short covering in a lot of sectors. We’ll see what happens the next two weeks.
Meb: This has been unbelievably interesting. I’m going to wind down with a few last questions. What does the scene look like outside of the U.S.? Is it as developed with the data and the analytics? Do people approach shorting and lending the same way? Is it something you can even get the same amount of data globally? Do you guys do it at all? How’s that look?
Ihor: Yeah, we cover 40,000 stocks worldwide. So we do actually have a big presence overseas, Europe, Asia, Hong Kong, China, Japan, all of Europe, Australia, we cover all the markets. We do have the biweekly regulatory reporting that you do in the U.S., but you do have like an ESMA has disclosures on holdings over 0.5% to the public, we use that. We have other sources of data on transactions, trade volumes, and such. Our algorithm kind of uses all that and gives us short interest for all the major names in all the major countries. Short selling is not quite as big in a lot of these countries, again, because a lot of times, it’s limited, regulatory-wise. There are some countries which stop short selling at the drop of the hat if something goes wrong. There’s a lot of rules of not being able to short sell certain stocks, a lot of it’s done in swap or other derivative forms. It is active. I mean, there’s a ton of short selling in these other countries. I think that the spreads are a little bit bigger on the stock long side. It’s a bit more expensive to short. So there is more income to be made if you’re a long shareholder in a stock that’s the hot short. U.S. is by far the biggest market for short selling.
Meb: I’m always surprised when governments try to go the route of suspending short selling in a sector, I mean, the U.S. has done in the past and it seems like such a boneheaded move to me. What do I know?
Ihor: No, it doesn’t work.
Meb: That too.
Ihor: The pricing doesn’t reflect the effort, they didn’t stop the short selling. Longs can still sell. You can stop the short sellers but longs are still selling and driving the price down. I don’t see…unless you make all selling illegal. It doesn’t really make sense.
Meb: I don’t suggest that the politicians may listen to you. Ihor, do you have any most memorable investment over your career? Anything that comes to mind that you think about good, bad, in-between, anything that just burned into your memory?
Ihor: Personally, no. Unfortunately, at every place I’ve worked at I can’t buy or sell stock. So I’ve been sitting on the sidelines looking at names, I go, “God, I wish I could do that.” So I don’t have anything personally. What I do see, on the flip side, I still look at these tech stocks that I thought were overpriced at $200 a share, $150 a share, and I’m saying, “Oh my God, these are all triple digit names.” So I think that what we got is momentum market. I think the shorts…if the shorts look at the momentum side of the market, as much as the longs do, I think they’ll become more profitable. I think it’s something that retail investors and institutional investors can do more often, and really make a big effect to their net alphas in their portfolios. Everyone should have a short.
Meb: I think I need to implement that rule in my company is it can’t own any security. My life would be so much happier. Remove all the stress, blood pressure goes down. I don’t have to watch the markets anymore. I love that idea.
Ihor: Yes, but that’s about it.
Meb: Ihor, where do people go? They want to follow your writings, they want to get in touch with your company to chat about what you guys are up to, where do they go?
Ihor: You can catch me on Twitter @ihorS3. We have a website, shortside.com, which is our website that we put up, actually, most of all my research goes on there, and a bunch of other commentary from other guys in our shop. We have on Bloomberg and Refinitiv, our Black App. So you can type in Black App and buy from the stores there and kind of use my data in your investment decisions. We have a retail app too that you can actually catch on shortside.com. So we want to have something for the retail investors who aren’t on these major data distributors for them to be able to see what’s going on in the short sell. I think that’s helped a lot for the guys who really want to try to short they have no idea what’s going on in the market.
Meb: For the newbies out there. It’s a deep dark, one of the most interesting rabbit holes on the planet, all the interest on the short side. We’ll add some links to some books and some other resources too in the show notes, mebfaber.com/podcast.
Ihor, this has been so much fun. Thanks for joining us today.
Ihor: Oh man, it’s been great. I really enjoyed it. Hopefully, we can do this again and maybe talk about some stocks in-depth and help more guys who are on the short side.
Meb: Absolutely. Thanks.
Ihor: Thank you.
Meb: Podcast listeners, we’ll post show notes to today’s conversation at mebfaber.com/podcast. If you love the show, if you hate it, shoot us email@example.com, we love to read the reviews. Please review us on iTunes and subscribe to the show anywhere good podcasts are found. My current favourite is Breaker. Thanks for listening friends, and good investing.