Bronte Capital
brontecapital.blogspot.com · Personal blog · on HN since 2009
John Hempton, an Australian hedge fund manager at Bronte Capital, writes about short selling, fraud, and company analysis.
What HN saysCommenters praise him as a favourite short seller with great stories about fraudulent companies, and recommend his Herbalife and Twitter buyout posts.
74HN people shared it
40linked it in comments
78stories submitted
730story points
4 years agolast shared
2009people per year2026
Most-shared posts
- 1Job interview questions: The size and scope of Alibaba5 people · 2 points · first shared 2015 · discussion on HN
- 2Homepage5 people · first shared 2014
- 3Some comment on the Twitter buyout rumours4 people · 11 points · first shared 2016 · 2 comments on HN
- 4Bronte Capital: Herbalife – the (very) long post4 people · 6 points · first shared 2015 · discussion on HN
- 5FTX and an Old Blog Post3 people · 5 points · first shared 2022 · discussion on HN
- 6Notes on visiting an Herbalife nutrition club in Queens (2013)3 people · 4 points · first shared 2013 · 1 comments on HN
- 7The Macroeconomics of Chinese kleptocracy2 people · 199 points · first shared 2012 · 84 comments on HN
- 8Changing My Mind On Microsoft2 people · 104 points · first shared 2012 · 111 comments on HN
- 9Kodak, Bill Gates and efficient markets2 people · 22 points · first shared 2009 · 10 comments on HN
- 10"Unless the Chinese can get the inflation rate up, expect a revolution."2 people · 14 points · first shared 2012 · 4 comments on HN
- 11Some comments on the New York Times story about Donald Trump's tax returns2 people · 6 points · first shared 2016 · 2 comments on HN
- 12A fund manager experiments with PC OSs2 people · 1 points · first shared 2012 · discussion on HN
- 13Lightsquared, some comments2 people · 1 points · first shared 2012 · discussion on HN
- 14High frequency traders phoney2 people · first shared 2009
- 15Some comment on twitter buyout rumours2 people · first shared 2016
What HN people wrote when they linked it
dcl · 2022-10-12
I'm not aware of one, but an Australian hedge fund, Bronte Capital led by John Hempton keep their own database of fraudsters and their associated with the goal of identifying dodgy businesses to short. He has discussed this on a number of podcasts.
His blog (http://brontecapital.blogspot.com/) is a good read.
parenthesis · 2020-04-27
Seek out interviews with my favourite short seller John Hempton of Bronte Capital. He has endless great stories about fraudulent companies.
He doesn't blog as much as he used to ( http://brontecapital.blogspot.com/ ), but there's loads of great older stuff in there.
MaysonL · 2016-10-11
Best analysis of the Twitter situation I've seen is by a hedge fund manager, John Hempton. "Some comment on the Twitter buyout rumours".
http://brontecapital.blogspot.com
michael1999 · 2022-11-14
Lots of people building real businesses do shady things on the way up. John Hempton wrote up a great example of this about a failed short play against Steve Madden Shoes[0]. Steve Madden may have been a fibber, but he made shoes people wanted to buy. The value of the shoes was larger than the fakery.
But when you are selling financial services, this kind of fakery almost always blows up because the accounting is the product. And if the accounts are fake, the thing is fake. Fake accounts always leave a hole that can only grow with each cycle of fraud. Dan Davies wrote a great book titled "Lying for Money" on the whole sorry process[1]. Galbraith called it the "bezzle".
[0] - http://brontecapital.blogspot.com/2011/05/steve-madden-counter-example…
[1] - https://www.goodreads.com/book/show/38605195-lying-for-money
hellogoodbyeeee · 2018-10-15
Betting on Zero is a great documentary. If you want a competing view point, you should read the blog posts by John Hempton, an Australian hedge fund manager.
http://brontecapital.blogspot.com/2015/06/herbalife-very-long-post.htm…
kurthr · 2018-02-28
I recommend reading Bronte Capital's take on this. He regularly evaluates short opportunities mostly related to fraud.
He actually visited Herbalife clubs before making a decision on shorting. He's not a fan of Ackerman.
https://brontecapital.blogspot.com/search?q=herbalife
carbonatedmilk · 2016-02-15
John Hempton, who is mentioned in the article, has an awesome, frank blog at http://brontecapital.blogspot.com.
Of course he's often 'talking his book', but he's always well researched and (I think) surprisingly open for a hedge fund manager about what he's thinking.
bainsfather · 2016-01-20
John Hempton, a (successful) Hedge Fund manager who specialises in finding frauds and shorting them, has been writing about Valeant for a year or so [0]. His primary arguments have been: accounting tricks are being used to give the appearance of high profitability, and that (some) Valeant people have shady pasts that indicate high likelihood of fraud.
[0] http://brontecapital.blogspot.co.uk
dbarlett · 2014-06-24
I don't always understand them, but I enjoy John Hempton's posts: http://brontecapital.blogspot.com
chriserin · 2011-08-08
Its worth noting that some investors are thinking this is a liquidity event because someone got a margin call rather than concern about euro economic concerns. I'd think its both. But yeah, u.s. bonds are doing fine despite the downgrade.
http://brontecapital.blogspot.com/2011/08/who-has-got-margin-call.html…
PowerfulWizard · 2019-08-21
Here is another look at the GE insurance business with some napkin math regarding the adequacy of their reserves: http://brontecapital.blogspot.com/2019/08/one-more-brief-comment-on-ma…
arbuge · 2019-08-15
An alternative viewpoint:
https://brontecapital.blogspot.com/2019/08/the-flat-out-silly-markopol…
As Charlie Munger says, always look at the incentives to understand people's behavior. Markopolos' sponsoring hedge funds are shorting GE:
https://www.bloomberg.com/news/articles/2019-08-15/ge-drops-as-madoff-…
"Markopolos is working with a hedge fund he didn’t identify and stands to benefit from bets that GE’s stock will decline, according to the Wall Street Journal, which reported earlier on the accounting report. Markopolos and his colleagues also hope to collect a whistle-blower reward by reporting their findings to regulators, the Journal said."
camjohnson26 · 2019-08-15
Here’s a quick blog post that points out a few problems with the report.
https://brontecapital.blogspot.com/2019/08/the-flat-out-silly-markopol…
It looks like Markopolis claimed GE’s margins were too good to be true, even though they’re below the industry average.
Also he compares this section of the business with another company that GE spun off, seemingly not knowing that they were originally linked.
Doesn’t seem like a very credible report if these 2 things are true.
jayalpha · 2018-10-15
I know. A bet that did not turn out too well for Ackman, didn't it? As mentioned by someone here and in my RSS Feed:
http://brontecapital.blogspot.com/2015/06/herbalife-very-long-post.htm…
[I don't have any position in Herbalife and I enjoy my shakes Harbalife free]
jk2323 · 2018-04-14
> Tencent Holdings Ltd., with nearly 1 billion users
Sounds reasonable. I would start wondering if they claim 20 Billion users, but hey, you never now.
Alibaba is also an outstanding company:
http://brontecapital.blogspot.de/2015/10/alibaba-yeah-right-jack.html
http://brontecapital.blogspot.de/2015/09/job-interview-questions-size-…
ridruejo · 2017-08-01
You may not like it, but it is not necessarily a scam. Some of the posts by Bronte capital mentioned in the article
http://brontecapital.blogspot.com/2015/06/herbalife-very-long-post.htm…
http://brontecapital.blogspot.com/2016/07/herbalife-and-end-of-world.h…
thisrod · 2017-02-02
This is an interesting counterpoint:
http://brontecapital.blogspot.com.au/2017/01/valuation-and-investment-…
scottkduncan · 2016-10-25
I'm not sure they vision you're describing is the direction private equity would take it, but with the major tech buyers shying away it does seem like a private exit is the most likely way this ends.
John Hempton summed up this view well: http://brontecapital.blogspot.com/2016/10/some-comment-on-twitter-buyo…
harryh · 2016-10-14
A lot of people think that twitter could relatively easily be made profitable by significantly cutting engineering staff.
http://brontecapital.blogspot.co.uk/2016/10/some-comment-on-twitter-bu…
arama471 · 2016-10-13
For anyone as confused as I was as to why the conclusion is 'inescapable', he seems to actually explain things in the previous blog post[1] and this one appears to just be an additional tidbit on top of that.
[1]http://brontecapital.blogspot.ca/2016/10/some-comment-on-twitter-buyou…
mikeyouse · 2016-10-02
This is slightly more complicated than the Times makes it -- but no more friendly to Trump. John Hempton has a good breakdown here;
https://brontecapital.blogspot.com/2016/10/some-comments-on-new-york-t…
Debt parking is a pretty interesting topic and would clearly be criminal tax evasion if discovered.
x0x0 · 2016-05-13
There's a difference between lack of clarity and fraud.
Bronte Capital discussed Single's Day, Alibaba / China's equivalent of black Friday. Taking Alibaba's claim of 278m package deliveries at face value, he compares the scale of infrastructure and employees required for Amazon plus Amazon Logistics/UPS/Fedex to deliver significantly fewer packages than Alibaba's claim to Alibaba's infrastructure/employees. The conclusion appears to be that what Alibaba is claiming is largely impossible and the numbers are very wonky.
http://brontecapital.blogspot.com/2015/09/job-interview-questions-size…
nieksand · 2015-11-11
Good post pointing out probable hanky panky behind these claims:
http://brontecapital.blogspot.com/2015/09/job-interview-questions-size…
tortilla · 2015-11-01
Some good articles here:
http://brontecapital.blogspot.com/2015/10/comments-on-blockbuster-vale…
alexhu11 · 2015-10-27
Valeant is especially pernicious case of credulous investors looking at a rising stock price and skipping their due diligence. There's a lot of amazing blog posts from John Hempton and others outlining the problems with their story.
http://brontecapital.blogspot.com/2015/10/some-comments-on-valeant-con…
http://brontecapital.blogspot.com/2015/10/simple-proof-that-philidor-h…
http://brontecapital.blogspot.com/2015/10/valeant-and-its-captive-phar…
http://azvalue.blogspot.com/2015/08/valeant-detailed-look-inside-dange…
http://azvalue.blogspot.com/2015/08/valeant-detailed-look-inside-dange…
hacknat · 2014-11-28
John Hempton shorted Subsys earlier this year:
http://brontecapital.blogspot.com/2014/05/insys-therapeutics-drug-deal…
Seems like news of their shenanigans are finally seeing the light. Literally, "Someone's going to Emergency, someone's going to jail..."
spindritf · 2014-08-16
John Hempton is pretty sure that Herbalife is not a pyramid, that people are buying that stuff to consume, not sell. Although his analysis depends on them acting at least somewhat rationally, there's certainly room on the market and potential enthusiasts, just look at Soylent.
http://brontecapital.blogspot.com/2014/08/for-kicks-just-how-big-is-he…
jakarta · 2014-03-10
You seem really sure of yourself.
Here's the counter argument from a noted short seller:
http://brontecapital.blogspot.com/2013/07/it-was-night-before-christma…
http://brontecapital.blogspot.com/2013/01/notes-on-visiting-herbalife-…
kokey · 2013-04-11
I quite like Bronte Capital's take on Microsoft's mistake with changing the interface http://brontecapital.blogspot.com/2012/07/changing-my-mind-on-microsof…
I think it has really sped up the process of people willing to go for other products even if they're not familiar with it.
OllieJones · 2012-08-30
Here's a contrarian piece on the Chinese personal savings rate: no organized retirement benefits means all kinds of hiding of assets.
http://brontecapital.blogspot.com/2012/06/macroeconomics-of-chinese-kl…