By Nicholas Varchaver
June 18, 2017

Good Morning.

Short-sellers tend to make good copy. Iconoclasts, not uncommonly of a belligerent cast, they challenge prevailing wisdom. That said, I don’t think I’ve ever read an account in which a journalist is embedded with a short-seller. “The Bounty Hunter of Wall Street,” in the New York Times magazine, is such a tale, and it’s riveting. It’s the story of Andrew Left, who received his stock education working in a boiler room but was subversive enough to turn against the sleazy traders and begin shorting the pump-and-dump penny stocks favored by the likes of Jordan Belfort, AKA “the Wolf of Wall Street.” Today Left is an “activist short” who has been instrumental in campaigns against Valeant and Express Scripts. He combines diligent research, a pugnacious camera-ready personality, and a mastery of social media. Fortunately for the reader, he lets a reporter hang around with him as he takes on Express Scripts and you won’t be able to tear your eyes away:

In 15 minutes, $6 billion of market capitalization vanished. (Five months later, the stock price is still down 13 percent.) Left considered the circus around him. “See,” he said, “some guys know this stuff better than me. But I know how to put it in [expletive] tweets.”

The article is filled with vivid writing that manages to be both entertaining and outstanding at explanation, such as this passage describing the history of shorting:

For many years that risk was taken on in secret: Short-sellers would make their bets and passively wait for the market to move in their direction. The figure of the activist, who goes public with his positions, emerged into prominence in recent years. One crucial event in Wall Street history provided the foundation. In 2001, James Chanos, a hedge-fund manager, discovered an accounting scandal at Enron, then a little-known energy company in Texas, and shared his information with journalists from Fortune. The journalists got a best seller, Chanos got his money and Jeffrey Skilling, Enron’s chief executive, got 24 years at the Federal Prison Camp in Montgomery, Ala.

Short-sellers of Left’s generation are following this example but cutting out the middleman. You don’t need an office in a flashy building in the Battery, they have realized, or the validation of the press. If you build enough of a reputation, all you need are some Twitter followers and a website. Left has emerged at the forefront of this new guard.

I enjoyed every moment of it.


The Bourne (Bitcoin) Identity

Speaking of riveting narratives, “The Ether Thief,” in Bloomberg Markets, is another superb example. It tells the story of a $55 million theft of digital currency, a Blockchain progeny known as Ether. As in the Times piece, the story-telling has panache and is rich in telling detail. It starts with the fact that vulnerable piece of software code, the one that is exploited in the crime, is line 666 (and the flaw was as little as one capital “T” in the code that should have been a small “t”). At one point, a character is awakened in bed by a phone call as the theft occurs: “He turned to his wife and said, ‘Remember when I was telling you about the huge unhackable pile of money?’ She nodded. ‘It’s been hacked,’ he told her.”

In its telling of the crime and then a minute-by-minute account of the attempt to stave it off mid-attack, this article feels a bit like the magazine equivalent of a Jason Bourne movie as it bounces from rural Germany to Rio de Janeiro to Ithaca, N.Y. But wittier: “We felt like the worst hackers in history,” a character says at one point. “We were foiled by bad Internet and family commitments.”

Like a good thriller, the story has plot twists, a moral dilemma, and okay, a bit of confusion. I’ll admit I got lost in places, but the journey was worth it in the end.

P.S. Bloomberg Markets’ profile of Scott Minerd, the barrel-chested bond-fund manager at Guggenheim Partners, is also worth reading. He’s everything Andrew Left isn’t—slow and contemplative, for starters. Minerd has been beating the likes of Jeffrey Gundlach and Bill Gross over the past five years and this thoughtful article provides some insights as to why.



Putting A Finger On It

What’s in a corporate logo? More and more, it turns out, and “The Most Important Quarter-Inch in Business,” in Fortune, will tell you why. This engaging history stretches from cave painting through the Bass Ale triangle (often credited as the first commercial logo) to the latest permutations in Uber’s symbol. The article starts with a fundamental observation—that what was once just a symbol is now something that customers physically touch dozens of times a day on their phones—and examines the many implications that flow from that. The piece itself is a bit like logos: It goes down super easy—it’s a joy to read—but ends up having way more meaning than you might imagine.

P.S. Once again, I’d like to echo an Alan Murray endorsement. If you haven’t had the chance to read Fortune’s rich narrative about McKesson and the opioid epidemic, you absolutely should.

Nicholas Varchaver
@nickvarchaver
nicholas_varchaver@fortune.com

 

 

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