We can all become better investors if we become better sellers and, especially, if we avoid bad businesses, we can reduce our mistakes. Studying short selling will improve your analytical abilities and help you be a more flexible investor.
Forensic accounting can a fun—like solving a puzzle and it provides a moral framework in which to look at public disclosures.
Video of a Short Seller’s Lecture to Accounting Professors
Kathryn Staley at the 2007 CARE Conference (video)
A lecture from the author of “The Art of Short Selling” given in 2007 at Notre Dame.
You want to learn how to sell even if you don’t want to be a short seller.
Staley’s book on short selling: http://www.amazon.com/When-Stocks-Crash-Nicely-Selling/dp/0887304974/ref=lh_ni_t
Short Selling Research Reports from Offwallstreet http://www.offwallstreet.com/research.html There are examples of good forensic accounting research here where you can also download the financials of the company mentioned so you can understand the analyst’s research. Try downloading a company’s financial report to find the problems BEFORE you read the corresponding research report. Create your own case studies! Hard work, but you will learn to improve your skills.
Blog on Chinese Stock Frauds:http://www.muddywatersresearch.com/
http://brontecapital.blogspot.ca/ (China’s Kleptrocracy)
www.fool.com on shorting stocks: http://www.fool.com/FoolFAQ/FoolFAQ0033.htm
White Collar Fraud: http://whitecollarfraud.blogspot.com/2009/12/overstockcom-and-patrick-byrne-have.html
Reuters – Special Report: From Hannibal Lecter to Bernie Madoff by Matthew Goldstein
Dag Blog – “Crazy Eddie” Fraudster Sam Antar To Return To Crime – Thanks to Darrell Issa & Anti-Regulation Republicans by William K. Wolfrum
Gary Weiss – Novastar and Overstock in the News
Crowe Horwath – Putting the Freud in Fraud: Focus on the Human Element, Catching a Crook Isn’t Only a Numbers Game By Jonathan T. Marks, CPA/CFF, CFE, CITP
Read more: http://www.businessinsider.com/the-feds-are-drinking-the-same-kool-aid-as-crazy-eddies-former-auditors-2011-5#ixzz1xg7WWMt0
Howard Schilit’s Financial Shenanigans: http://www.amazon.com/Financial-Shenanigans-Accounting-Gimmicks-Reports/dp/0071386262/ref=sr_1_1?s=books&ie=UTF8&qid=1339591819&sr=1-1
Thorton O’Glove’s Quality of Earnings (Joel Greenblatt uses this in his Special Situations class) http://www.amazon.com/Quality-Earnings-Thornton-L-Oglove/dp/0684863758/ref=pd_sim_b_4
Forensic Accounting Book: http://www.amazon.com/The-Financial-Numbers-Game-Accounting/dp/0471770736/ref=pd_sim_b_9
Earnings Magic: http://www.amazon.com/Earnings-Magic-Unbalance-Sheet-Financial/dp/0471768553/ref=sr_1_1?ie=UTF8&qid=1339592203&sr=8-1
A plug for Earnings Magic: I try to read various books on the subject of manipulating or managing earnings to enhance my analytical abilities. Because the GAAP rules give executives certain freedoms, it is valuable to know the true story behind these numbers. I like how this book educates readers on where to look to find clues for earnings management. For me, the chapter on pensions and other postemployment benefits was beneficial. During the current economic crisis, many companies struggle with their defined benefit plans, and this chapter educates readers better how to read through financial notes to gain better understanding of the pension status. – Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market
Research on Short Sellers
Overall, our evidence suggests that the information short sellers exploit mainly concerns the market’s misperception of these firms’ fundamentals. Research_Shorts Signal Misperception