In this episode I'm joined by special guest, Laks Ganapathi, founder and CEO of Unicus Research. In this candid conversation, we delve into the often misunderstood world of short selling and its impact on the stock market. We also look at some recent investing themes like ESG and craft beer to see where hype and optimism has led to poor investment returns.
Laks sheds light on the misconceptions surrounding short sellers. She acknowledges that some short sellers may contribute to a negative image by pumping stocks for profit, but she emphasizes that this isn't representative of all short sellers. The conversation touches on the ethical concerns of short selling and the need for transparency in financial markets.
We explore how issues with management and unethical legal practices can be red flags for investors. Laks emphasizes the importance of short sellers in acting as checks and balances for corporations, preventing them from making unchecked claims. This section provides valuable insights for beginners on what to look out for when evaluating potential investments.
The discussion turned to this article ESG – A Good Deed With An Incentive To Scam | IFC Re... (ifcreview.com) As Milton Friedman says: "The Social Responsibility of Business Is to Increase Its Profits."
Laks shares her unconventional path into the world of finance, recounting how her skepticism and curiosity led her to short selling. Her journey from India to Wall Street and her experience working with an independent research firm add a personal touch to the conversation. This segment is not only informative but also inspiring for those considering a career in finance.
We touch on the nuances of short selling, acknowledging that it's not always about negativity. They discuss how short sellers play a crucial role in uncovering frauds and maintaining a fair and transparent market. This section aims to provide a balanced view, encouraging listeners to consider both sides of the short selling narrative.
Worth checking out Unicus' weekly Monday morning reality check. A complimentary newsfeed to the investor community: Unicus Research
Laks Ganapathi is the founder and Chief Executive Officer of Unicus Research – an independent investment research platform that combines fundamental analysis with hard-to-find information from atypical sources.
Laks's vision is to redefine how asset managers and investors consume research. Laks’s work on ESG is featured in the London Stock Exchange Issuer Services.
Unicus Research, is sector agnostic. However, the team specializes in clean energy, technology, geopolitics, automotive sector and the EV sector. The team comprises industry-leading experts in corporate financial fraud, forensic intelligence, investment intelligence, cybersecurity, Electric vehicles, sustainability, Blockchain, clean energy, and biotechnology.
Laks has more than a decade of experience in accounting and finance. Before founding Unicus Research, Laks was a dedicated short investment analyst at a boutique investment research firm led by a Wall Street veteran. Laks earned a Master's in Business Administration (M.B.A), graduating magna cum laude, from the University of Connecticut. In addition, she earned two Bachelor's degrees focusing on commerce and accounting from domestic and international universities.
TRANSCRIPT
Chloe (1s):
Shares for Beginners, Phil, Muscatello and FinPods are authorized Reps of MoneySherpa. The information in this podcast is general in nature and doesn't take into account your personal situation.
Laks (12s):
That's why short sellers get a bad name because they pump the Stocks and that is not fair to the Investors on both sides of the spectrum, right? And I have seen that short seller over an hour again on the television, say that blah, blah, blah, stock is a fraud. Stock goes down, his clients cover the money, he makes a nice profit. That is not what we are about. And that is a problem with running your money and having a research firm and calling yourself an activist short seller. I am sure the intentions are great, but that is not us.
Laks (53s):
And I have an inkling that that is the reason why short selling is getting a bad rap.
Phil (1m 1s):
Hi and welcome back to Shares for Beginners. I'm Phil Muscatello. How can issues with management help uncover companies to avoid? How about unethical legal practices? Joining me today to look at the bad and the ugly and a little of the good on the stock market is Laks Ganapathi. Hello, Lex
Laks (1m 19s):
Hi. Phil. How. Are you? Thanks for having me.
Phil (1m 22s):
Thank you very much for coming on. It's great to have you. Laks Ganapathi is the founder and chief executive officer of Unicus Research, an independent investment platform that combines fundamental analysis with hard to find information from atypical sources. So Laks , let's just start by talking about your career and background. How did you find yourself at this point in your life?
Laks (1m 45s):
Well, I started my career. I never thought I would end up in Wall Street. It's always been a dream for people who are in Ivy League schools. As such a kind of a pedigree, you end up in Wall Street. I never thought of it. I finished my bachelor's and master's in India, came here for my master's in 2007. So then I started my MBA and there was a point where I got very, very curious about the market, but always this Stocks going up did not make sense to me. I, You you, you know, you invest and maybe it's my personality of being a little cynical, short selling attracted me right away.
Laks (2m 32s):
And I worked at a boutique independent research firm for someone by the name Rob, and he's been in the industry for 20 years. So I learned pretty much everything from him. It's very unfortunate that I couldn't say I learned it from my MBA. There was a huge dislocation or dissonance between what you learn at universities, but what's happening in the real world. But I worked with him and whatever I learned, I learned from him. So what I do today is when I started, you look at a company and you question because everybody's talking great things about the company.
Laks (3m 15s):
You question, all right, what is something that is not right and you start digging. And along with that, the fundamental analysis, that's how I ended up here. And in 2020 I started my own firm and so far we are doing good.
Phil (3m 34s):
So short selling is basically when people are punting that the market is going to go down or a particular company is going to go down rather than going up. and it often has a bit of a negative connotation in Investors people's minds. They seem to think that short sellers force prices down. Do you think that it's it's all negative looking at only the negative of companies?
Laks (3m 54s):
No, I think short selling and short sellers are essential for capital markets. They're very essential, especially they are the one in a way keeping the corporations and the management as like by acting as a checks and balances for them. So the management knows that they cannot say whatever they want and get away with that, which is pretty much what they are doing. So no short selling is not always about negative. There are frauds it happening around us in the market. It is frustrating and the way it happens is you have a process going, you have the market is running, it's a free market and it's all is great.
Laks (4m 39s):
When the greed starts to take over, then everything falls upside down. For instance, you know, in 2020 when I started the firm, special purpose acquisition companies are a big thing SPACs everybody who has like a backer starting a spac. The SPAC is nothing but a blank check company, which back in the days was very frowned upon and was equated to fraud. But in 2020 when started all the electric vehicle companies started, ESG started. So all of a sudden Larry Finks of the world wanted to say, Hey, I wanna save the world.
Laks (5m 21s):
You know, everybody is polluting and ESG is the next best thing. If you invest your money, it's green. And Investors do invest. You know, Investors are smart retail Investors and institutional Investors, they're not dumb Phil. They are smart, but even smart people have the tendency to get carried away when you say, hey, a good thing. And if I ask you Phil Phil, I'm starting in SPAC, you know it's ESG, are you going to invest? You'll think twice because if you say no, then are you against environment?
Laks (6m 2s):
You know? So those kind of emotional moral manipulation was going on. So in that sense, stop short selling is actually pretty good. So we recommended our Investors who are institutional mostly and some of them are family offices or people Investors managing their own money. So they wanted to know, hey looks, can I invest in this company? So for instance, we canoe, canoe came up with the new model, I dunno if you know it, it's like a box car and you can change the top anytime you want. and it initially started with a subscription model and became public via spac stock was Trading at 35 something and I started digging into the entire EV sector.
Laks (6m 55s):
First of all, it's not green as much as you would like to think when you are driving an EV, there is a high chance it's more fashion oriented than green. You are not adding any value to the environment. Because if you see, we studied the entire upstream midstream and the downstream process of EV and none of them are greenfield. So the electricity you are charging, your car is not green. If you wanted to go green, you have to revamp the entire electricity and the infrastructure worldwide, very cost intensive.
Laks (7m 41s):
The batteries that go in the EVs not green. So short sellers like us, we are pretty much calling out the management. We do not speak to the current management. We spoke to the previous employees. We even hired a battery systems engineer in 2020. He had the experience working with quantum scape, he had the experience working with BMW. So this gentleman worked on the battery management system. So it's very complicated and full obviously, you know, if you wanna follow up or it will take a lot of time to go deep digging into this, but in a nutshell, 40% of your EV battery goes against the cost.
Laks (8m 30s):
So for you, for any company, GM lost billions of dollars, Ford lost billions of dollars. Tesla, we consider Tesla as a cult stock. We don't even know what's going on in their accounting. But the point being to scale an EV into a mass production is very, very cost intensive. So short sellers to answer your question, are very, very essential for especially in this kind of environment. So no, we are not all bad. We are actually, I would like to consider a good
Phil (9m 11s):
And it's also about price discovery because you've gotta look at both sides of the story, the good side and the bad side of the story. Yes as well. That that'd be the case, wouldn't it?
Laks (9m 20s):
Yes. The good side is we want environmental friendly transportation. We want a change to happen. At the core you could say there are some manufacturers with good intent at their heart, but sadly if you see all the debt corporations so to speak, Kanu went from $35 to 50 cents today. Fisker got two chief accounting officer, they both left the company. There were so many frauds going on. But yes, everything starts with a good intention. But the company so far we have explored, having said that, as you said, there is not all bad Rivian.
Laks (10m 6s):
On the other hand, we haven't published a short report on Rivian. That is one company we have faith in. We did not publish a long report, but Rivian is something worth looking into because it has, Amazon has at least 10%. Last time I checked on Rivian, I actually went into a Rivian Amazon truck. It's pretty cool. It's very efficient, right? And you can see as we spoke with the drivers, have you been in one of those cars? Phil?
Phil (10m 41s):
No, we don't have them in Australia, no. Oh you don't yet? No, no.
Laks (10m 45s):
It's actually pretty cool. You don't have the regular rusty things you see in a van. It's smooth. It has a lot of space and delivery. Guys are sharing with us that all they have to do is charge overnight and they are good to go all day and it carries a lot of cargo, you know, in a small space. So Rivian is very interesting. Yes, they do lose money, but they have future.
Phil (11m 13s):
So when I was looking at the blurb on your website, Laks, you say that you wanna redefine how asset managers and Investors consume research. Is this because you're trying to provide a bit of a reality check? Is that what you're trying to do?
Laks (11m 25s):
Yes. That's a very nice way to put it. So thank you. I have respect for everybody who, who are in this industry. It's a very small industry and no one can be smarter than the market. The market always will put you in your place whether you are on the long side or short side. So being humble, if one is not humble, market will teach you that. Having said that, we are focusing on how the research is consumed. I'll tell you why. When I worked with my mentor, we catered the who's who of Wall Street, all the big names you hear, we catered them.
Laks (12m 5s):
There is a kind of dissonance you go into. That's why we tell our clients, we accept clients anywhere between a billion dollar or less. Anything more than five or $6 billion, I don't wanna touch it. The reason being, you have politics inside the firm. You have people get so attached and emotional towards a stock, they get mad, they get angry. So you move away from fundamentals, you move away from making money, return on investment on the downside and things get personal. So where we are standing is none of our team, we do not take position on the ideas we recommend.
Laks (12m 51s):
We do not trade on our ideas and it gives us, for lack of better words, freedom to take a look at an idea objectively and without that emotion attached to it. For instance, one of our team member Rob MacArthur, we semi manage a book for one of our clients. Over the past two weeks, the market rallied for no reason. There is no rationality behind a market ral. So when the market rallied, we pretty much asked our clients to shave off position, take some out, close the position completely not because our conviction level on our short idea is low.
Laks (13m 38s):
It's because, hey, our research is right, our conviction is high. That doesn't mean you need to get killed in the market. You do not fight the market.
Phil (13m 48s):
Yeah, can't, you can't fight, you can't fight momentum can you? And there's no reason often, like you say, there's no reason behind momentum.
Laks (13m 55s):
No, no reason behind the momentum. One of the Stocks we were recommending solar edge and and phase as a shot we spoke with as a part of the deep dive. We created a relationship with nearly thousands of installers over a platform. And we did surveys and for instance, solar Ridge was 322 fourth quarter 2022. We recommended it as a short, it was in February, 2023. The reason we waited two months is because at that point SolarEdge was I think almost close to its 52 week high.
Laks (14m 35s):
We do not recommend short ideas at a 52 week high. It's the worst entry point. So we in Feb, we recommended SolarEdge as a short it nice and easy, it went down all the way to $70, right? 80% profit. On the downside, we asked all our clients to take the money off. We mentioned to our clients, we are determined that this stock is going to go way further down. However, we are not fighting the momentum. So all the value Investors at this point we'll be like, hey, this is so cheap, I wanna get in. And you have, you're fighting the value Investors who will be fighting the black boxes.
Laks (15m 17s):
So better to take your bounty, go sit aside, wait for everybody to clear, and then you can get back in at the whatever the highest price at that point is. So do not fight the momentum.
Phil (15m 32s):
So you say that you use fundamental analysis to help identify company problems. Yes. Now this is fundamental analysis is using data that's publicly available to anyone who's interested in researching a company. What Is it that you're particularly focused on to look at finding certain problems?
Laks (15m 50s):
There is a direct way and an indirect way to answer the question. So when we identify a company, for instance, SolarEdge, right? The fundamental immediately does not tell us the story. That's because everybody talks a great thing because you know they are flushed with cash, you know the debt is low, operating income is great. Then you think what we do is we go to the people who directly deal with that company's product. In Solar Edge it's the installers, it's the electricians. So we do our primary research first and gather as much information as we can.
Laks (16m 31s):
And then we will go to the fundamental analysis and question what this number means in the light of the primary research we got. So that gives us a whole new way to look at the fundamentals. But if we look at the fundamentals right now for a company that doesn't say anything because it looks all peachy. So that's where we differ.
Phil (16m 58s):
So you're using atypical sources as we mentioned in the introduction to find out information on the company. What are some more examples of atypical sources that not other Investors are not looking at?
Laks (17m 9s):
So one is you always find a forum, right? Everybody has a forum, whether it's Reddit or any other social media. You go to a forum, you find specific people, group of people, and you go in and you're just awesome. And you would be surprised how candid they will share the information. The second is, in 2015 when we were recommending in my previous company, Sam Adams, Boston Beer Company, it was in America's Sweetheart, everybody likes beer. So we got a lot of pushback. We were told you are shorting an American brand.
Laks (17m 54s):
You know, people get so emotionally attached. So we found out a series of email addresses of the breweries nationwide and we did a good old survey. Survey. We sent out at least 500 surveys. We got roughly 5% response rate and we created a dialogue with each and every one of them. We realized in 20 15, 20 16, where our craft brewers are taking up the market share and consumers have no loyalty and they like the Christmas of the beer and Sam Adams it, it didn't cut it.
Laks (18m 34s):
Consumers are not attracted to the brand. So the stock was at 233 roughly. I was Trading pretty good and we recommended it at that point, we validated our thesis with our primary research and our survey. The stock was at 2 33 and it went all the way to 130 something. We wrote a cover that was a decent chunk of profit to our clients. So that is a several reasons. So you look for, you talk to people, you know the good old research, that's what we do and that is our key differentiation.
Phil (19m 12s):
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Laks (20m 39s):
Phil, you have a nice way of asking deep questions with a very innocent, okay, so what you're pretty much asking
Phil (20m 46s):
Is with with a a big cheese eating grin.
Laks (20m 49s):
There you go. What you're really asking is, or in the short seller is the real culprit. So I'm gonna answer this as politically correct as possible. The one thing, because Wall Street is such a small, small world and I like to stay out of inside the world, but not in codes with anyone. I call myself a short seller. I do not call myself as an activist short seller. And there is a reason for it. So we will find companies that are not performing at its fullest. Companies that are, you know, bad actors, so to speak, find them, validate them with our thesis, confirm it, make sure our institutional clients and family offices don't have any blind spots, make money for our clients.
Laks (21m 42s):
End of story. We do not speak about our current ideas on Twitter. We do not go and say that manager is, I can call four letter of words. We don't do that. And that's where activists, short sellers, some of them are having a bad reputation. Early in my career I encountered a short seller who I might not name, he called me and he said, well I like I was shorting, we were recommending an ultra low cost carrier for the corrupt management. I was sending out emails to Department of Transportation and all of those.
Laks (22m 22s):
We didn't advertise it. So the, I got a call from this gentleman and he organized a meeting. So I went there and he was with this lawyer, no, not a fancy office, he has some media presence shall we say. And he said, I want to buy your idea. I said, I'm not selling my idea. And this is where Phil short sellers are getting a very bad reputation. And I told him, with all due respect, I'm not selling idea. He goes, I'll pay you a hundred thousand dollars for this idea and you can argue it and I'm going to go on television C-N-B-C-M-S-N-B-C, and I'm going to say, this is my idea.
Laks (23m 6s):
My company came up with it and the stock will go down, right? And my clients will make money and I'll cover the idea, cover the shot. But once you sell the idea to me, it doesn't belong to you, you can give it to your clients. I said, I want this meeting to be over right now and I am not going to give you my idea. This is not my style. All I could think of Phil was a, oh my god, it's a pump and dump. Right? And that's why short sellers get a bad name because they pump the Stocks. And that is not fair to the Investors on both sides of the spectrum, right?
Laks (23m 49s):
And I have seen that short seller over and over again on the television say that blah blah, blah, stock is a fraud. Stock goes down, his clients cover the money, he makes a nice profit. That is not what we are about. And that is a problem with running your money and having a research firm and calling yourself an activist short seller. I am sure the intentions are great, but that is not us. And I have an inkling that that is the reason why short selling is getting a bad rap. It's annoying Phil actually because you do all the hard work and it's like a couple of guys do a bad thing and the entire generation gets blamed for it.
Laks (24m 36s):
And that's how short sellers feel.
Phil (24m 38s):
And the other side of it really is, is that people wanna be apprised of these poor investment thesis and not because they wanna make money from shorting it, but just even just to avoid a particular company. Wouldn't that be the case?
Laks (24m 51s):
Yes. And that's what I tell certain institutional Investors and retail Investors, right? That even if you're not shorting it, at least know the companies that you need to stay away from because you don't, you don't wanna get a burn. And short selling is very, very risky and you do not listen to any and every short sellers. Do not listen to short ideas that you come across on Twitter or X or whatever it is. Do not listen to short ideas or any kind of investment ideas, especially short ideas on TikTok or Instagram or Facebook or whatever. It's short selling is very hot.
Laks (25m 31s):
It involves a lot and lot in hours and hours of research by experts. and it also takes someone to clearly take a step back, say if I were to do months and months of research on a company and at at some point the technical is against us, doesn't matter if my thesis is right, a company might very well be a fraud. Tesla is a classic example. Tesla might very well be a fraud, but are you going to go bankrupt by proving that Tesla is a fraud? Probably not, right? So I see a lot of tickers saying Tesla Q or you know, blah blah blah Q.
Laks (26m 17s):
That's one of the example of emotionally getting attached to the stock. Probably you'll be right five to 10 years from now, but how much money you are going to lose on the short side to prove that you are right because the downside risk is unlimited Phil.
Phil (26m 35s):
What's Tesla Q mean? Is that some sort of internet talk that I'm not aware of?
Laks (26m 40s):
No, no. Tesla. Whenever you put a ticker symbol and put Q means that inate the company is expected to go bankrupt.
Phil (26m 48s):
Oh, okay. That's a little bit of code there. Yeah.
Laks (26m 51s):
So people are, you know, when they are finding something or the stock goes down for once in a lifetime, they go, oh takes test like Q you know, this is about how it's going to end. But institutional Investors as well as retail Investors have lost a lot of money on all of these ideas by getting too close to emotionally when they're investing.
Phil (27m 14s):
You mentioned That ESG is another area where people get very emotional about because people wanna be doing the right thing. And I was reading an article that was really interesting and we'll put a link to that article if that's okay with you. Sure. To the blog post is That ESG is a good deed with an incentive to scam. Tell us about that.
Laks (27m 33s):
Listen, environmental and Milton Is it Milton Friedman. Yes. So
Phil (27m 41s):
You, yes, I saw the, I saw the Milton Friedman quote as well. What's it the duty, the duty of a company is
Laks (27m 48s):
To make profit, it's, it's to make profit. You know, sometimes you say things out loud and it will come across ugly and it makes you feel like E but that's the reality. For instance, Target, Target wants to relate to the L-G-B-T-Q community and how they reach out. You know, you can think a lot of things, but before when you act on it, you have to think that you can divide your customer base 50 50 as a company. If you take a stand, you are going to lose 50% of your revenue right off the bat.
Laks (28m 28s):
So for instance, I do not take political stand and I refuse my employees to take political stand on any social media because I will eliminate 50% of my revenue stream. This is, to be completely blunt, everybody has bills to pay and your opinions will impact your bottom line. And that's where I think researched ESG scam Larry Fink has annoyingly led this ESG and now he just ditched it. And I don't even want it to, I haven't researched it in a while, but I'm happy to do so to see how much money Investors lost on the ESG.
Laks (29m 15s):
If you also look at ESG in 20 21, 20 22, if you look at, I will also share with you a link that I posted the top ETFs on ESG, Vanguard and BlackRock. If you see the first five companies are not ESG, none of their products are not ESG. And if you take Apple, apple is not E-S-G-E-S-G means your entire supply chain pipeline needs to be kosher. You cannot use slave labor, you have to pay the minimum living wage.
Laks (29m 57s):
So none of this amounts to any of the companies that we have currently. So that's why I said ESG is a scam. It's done to make, attract more capital. Hedge funds, corporations use that buzzword to attract more capital. They successfully did tax benefits, especially in the United States. So those are the reasons. Electric vehicle tax subsidies, those are the reasons. And if you remove all of this, I don't think for consumers will be giving 2 cents whether they want to be environmentally friendly. So it's a a gap.
Phil (30m 37s):
It's also, yeah, it's also the marketing exercise. So many ETFs they troll through social media to see what buzzwords are trending. Yeah. And then they'll design an ETF based on that. And ESG seems to be the one of the biggest examples of this. And as you've pointed out, you might feel good about what you're doing, but it's not actually achieving the aims that you've got in mind as an investor.
Laks (30m 59s):
Yeah, for an investor, it's as ugly as it sounds when we say it, all it matters is a return on investment. They might not say it out loud, they travel in the jet planes to whatever the meeting spot and have AESG meeting and you have the protestors, climate protestors wearing a jacket that's made out of non ESG products. So I would say it's such a blind following Investors as much as everybody would like to think they are smart, which they are. But When, it comes to anything emotional, they get carried away and ESG definitely was one of them.
Phil (31m 44s):
Yeah, I think the hippies of the seventies and the sixties had more credibility in the ESG space by basically going and setting up their own communes, growing their own food, making their own clothes. And I mean that's the kind of level that you need to work at to become completely ESG compliant. Really.
Laks (32m 0s):
You are absolutely right. Phil, and you said it correctly, 1960s, seventies hippies are more ESG than Larry Fink at BlackRock or anybody else
Phil (32m 12s):
That stands to reason, let's face it. Because Larry Fink has never been a hippie. I'm sure,
Laks (32m 18s):
I'm sure.
Phil (32m 20s):
So we have an abundance of geopolitical forces at the moment and we're recording on the 21st of November. What effect that having on certain Stocks and are you seeing any moves here that help you to highlight a short thesis?
Laks (32m 33s):
Geopolitical forces is something we consider and whenever we consider that we think about China, that is a huge topic. Unicus research has always been advocating not to invest in any Chinese company or Chinese investment products. And
Phil (32m 52s):
Even, even the, even the ones listed on the US stock market.
Laks (32m 55s):
No, the reason is, and I will also share some of them with you, and the reason being right, you cannot, whether it's Australia, whether it's Europe, whether it's United States, any democratic nation that believes in free market cannot do business with authoritarian regimes. End of story. Every country in the world has some kind of corruption, but at least in a democratic free market economy, you have some kind of regulation, some kind of transparency, some kind of accountability and doing business with the authoritarian regimes, for instance, China, they are not transparent.
Laks (33m 43s):
Their numbers cannot be trusted. None of us can't, will be allowed freely into their country to do our own due diligence. However they expect us to comply because we are democratic and we are free economy. It's
Phil (34m 0s):
It's a and have a have a legal system in place as well.
Laks (34m 3s):
Exactly. Thank you. And, and it's not political, it's not taking like, you know, they are bad. We are good. It's, just think about it. How could you honestly do a business with authoritarian regimes? You have no insight to where the money goes, what things are done, what are the due diligence. You have no transparency. So we advise or Investors to stay away from investing in Chinese companies and the products or the investments in China.
Phil (34m 38s):
So this is more than just a short idea, isn't it? This is more of the idea of what companies to stay away from that the, the research throws up.
Laks (34m 47s):
Yes, it's both. One, most of the publicly traded Chinese companies registered in the US will be registered via ADR. So I, I don't know exactly the ins and outs of shorting in ADR second. Yes, those are the companies to stay away from and those are the platforms to stay away from. TikTok is something that we recommended not to take any advice, especially investment advice. We were a strong proponent of banning TikTok in the United States. There is an other Temu, I believe it's like PDD holdings, a Chinese e-commerce company.
Laks (35m 31s):
I believe the ticker I said is right, PDD holdings. Temu gets into the advertisement of every single medium social media platform where it leaves the consumers to giving the information and get the products for cheaper prices. And people have lost a lot of money and lost their credit by using those platforms. When, it comes to geopolitics. We advise the clients to stay away from. And when the Russian Ukraine war started, we, one of our senior analysts started writing a piece on geopolitical tensions about what will happen.
Laks (36m 12s):
And those are the things we continuously monitor. What we do is there is a lot of moving pots macroeconomically and keeping tab on the housing keeping tab on the feds format notes and keeping tab on yellow and strip to so and so. It's a lot of work and what we focus on is the things that are not said in the media. And that's the information we look for because by the time the information that we know comes to the media, it's already too late. The automotive sector is a classic example. We are deep into the automotive dealership sectors.
Laks (36m 53s):
We speak to a lot of dealerships. So the Manheim and Cox automotive datas, they are incongruent with the reality. So everything affects the market and it's hard for us to constantly monitor it, but we are trying our best, I dunno if that answers your question
Phil (37m 16s):
More than amply. Thank
Laks (37m 18s):
You. It's hard in the market to make money as a bull as well as as a bear. And as you know, Jim Chalmers quit the hedge fund. He shattered his fund and his statement was the market is irrational. And he, I believe, recommended he was shorting Tesla at some point. And I shook one of her clients out of Tesla's short position. You cannot test that stock. If anybody is listening to this podcast, if you short Tesla, please do not do that. It, it is, it's not worth the risk.
Laks (37m 58s):
The risk and reward Is it, it's not worth it. And no fund managers personally who lost a lot of Investors pulling out of their funds because they're so emotionally attached to their thesis. I know one fund manager said, I don't care if the outside Investors take their money out. I know this company is a fraud and this company will go down. The company did not go down. It, it's, it's very, very hard. There is no right or wrong answers to short selling. It's just that a constant due diligence, doing the primary research, checking your sources, rechecking your sources to make sure you got everything right so your clients won't lose the money.
Phil (38m 48s):
Okay. So Unicus research, tell us about the company, how listeners can find out more, and especially about your Monday morning reality check newsletter, which you provide for free.
Laks (38m 58s):
Yes, I do. We do that Unicus research.com, U-N-I-C-U-S research.com. What we do is provide very deep dive short only independent research. We also provide ott, meaning we can customize it right now, have institutional Investors as client and also some individual Investors who are aware of shorting but need a little bit more help. So if you're interested, feel free to reach out to us. You know, we have a contact us page on our website. You can reach out to us effective next year. There might be increase in the subscription fees, but anybody who signs up between now and end of the year, we are offering a feature of grandfathering in.
Laks (39m 47s):
So you're welcome to try that.
Phil (39m 50s):
Laks, it's been a bracing episode of a reality check. Thank you so much for joining me today.
Laks (39m 56s):
Thank you so much Phil. Thanks for having me.
Chloe (39m 59s):
Thanks for listening to Shares for Beginners. If you enjoy listening, please take a moment to rate or review in your podcast player or tell a friend who might want to learn more about investing for their future.
Thanks for having us Phil.
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