The inauguration of the Kerrisdale Capital Management hedge fund in 2009 coincided with a historic bull market. Despite the budding trend of stock back then, the hedge fund’s founder, Sahm Adrangi, decided to bet against the stocks. By doing this, Adrangi established himself as a short seller. In 2017, Kerrisdale recorded an impressive 20% gain. According to Sahm, short sellers have the upper hand over other investors following the market swoon earlier this year.
Sahm Adrangi is Iranian by birth, although he spent much of his early years in Vancouver, Canada. A graduate of the Yale, Sahm made his mark seven years ago when he earmarked several Chinese enterprises that he perceived as the propagators of fraudulent schemes. Since them, Adrangi has become a prominent short seller, taking on multiple established companies. His most recent short bet is on Eastman Kodak, a firm whose stock shot up significantly after it became apparent that it was planning to launch a blockchain-backed platform to protect photographers from copyright flouting. As Sahm predicted, the stocks have plummeted by a whopping 55%.
According to Sahm Adrangi, short selling is a fairly risky venture, especially given that the market has been bullish for the best part of the last ten years. In this regard, Sham revealed that he has lost over 200% on certain short trades. However, an ebullient market is also good for short activisms, since it increase the likelihood of stocks losing their valuation in a relatively short time.
While 2017 was admittedly tough for short sellers, Sahm Adrangi is confident that the faltering of the markets in February will compel investors to look out for short sellers. Moreover, the demand for short seller hedge funds will most probably intensify. This is because unlike long exposures which is accessible through ETFs and mutual funds, short trades are only accessible via hedge funds.
Regarding the proliferation of cryptocurrency startups, Sahm Adrangi acknowledges that ther will be as many losers as there are winners. He added that many companies are launching blockchain products that are not applicable in real life, citing Eastman Kodak as an ideal example.