Carson Block Quotes
101 Carson Block Quotes
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[In March 2011.] Yes, I do invest ahead of my reports, as I disclose.
Carson Block
[In March 2011 on Chinese reverse mergers.] Understand there are conflicts of interest. Some of the legal, banking and accounting gatekeepers who are supposed to protect us from malfeasance are receiving fees from companies that could be committing malfeasance. Be skeptical.
Carson Block
[In March 2011.] If you are listed in China or you are scamming Chinese investors, if you are Chinese, there is a much higher degree of risk then if you are scamming U.S. investors.
Carson Block
[In March 2011.] There is a lot of fraud being committed among U.S.-listed Chinese micro-caps and it is time to clean them up.
Carson Block
[In March 2011.] I am also looking to expand my understanding of other emerging markets, including Latin America.
Carson Block
[In April 2011.] The reason these scams have worked is because there’s “regulatory arbitrage’. That means companies may be breaking the law here, but the businesses they’re lying about are all based in China - so you have to conduct investigations in China.
Carson Block
[In June 2011 on Sino Forest] They overstated assets by billions of dollars and funneled money to an undisclosed subsidiary.
Carson Block
[In June 2011 on Orient Paper.] They appeared to be transparent, but they had fake transparency. The funniest thing was they had a large heap of scrap cardboard. They listed this on the books as raw material worth millions of dollars.
Carson Block
[In June 2011 on the name ‘Muddy Waters’ being derived from a Chinese phrase that says the easiest way to catch fish is by muddying the water, forcing it to the surface.] You kick up the silt, and they rush to the top of the water. This explains a lot about how things work in China.
Carson Block
[In June 2011 on how things work in China.] Business deals are rife with value subtraction layers. The more opaque they make it, the easier it is for them to siphon off money.
Carson Block
[In June 2011.] I've started to think of investment banks and the investment banking industry as just manufacturers of financial products. They have to keep bringing new product to market, and in a situation where there's so much pressure to do that, you're definitely going to have poor financial product that gets brought to market.
Carson Block
[In June 2011 on Sino-Forest.] A Ponzi scheme as it perpetually issues new securities to fund itself. Were the company unable to issue additional securities, it would collapse. [In March 2012 Sino-Forest filed for bankruptcy.]
Carson Block
[In June 2011 looking back on Orient Paper] It seemed there was some opportunity there, but I had no idea how big it was.
Carson Block
[In July 2011.] All people need to know is that I have a clear conflict of interest.
Carson Block
[In July 2011.] Within the fraud-committing circles in China, the U.S. markets were a laughing stock. They thought of Americans as dupes willing to snap up any piece of garbage brought out of China. Now it’s the complete opposite.
Carson Block
[In July 2011.] The company is saying ‘you don’t understand the tree business.’ The analysts say ‘oh, he doesn’t understand our industry.’ You know what industry I do understand pretty well, it turns out? The fraud industry. So I don’t need to know trees to know fraud.
Carson Block
[In July 2011.] These guys are like sheep to the slaughter. How do I know? I once was one. I lost a lot of money in China through hard lessons, as did most entrepreneurs I know there, before I really understood where the pitfalls are.
Carson Block
[In July 2011 on his meeting with Sino Forest’s head of investor relations.] I even combed my hair forward for a ‘Dumb and Dumber’ kind of look. I tried to sound really dumb and speak even more slowly than usual. I went in with a rumpled appearance. I just tried to seem like an idiot.
Carson Block
[In July 2011 on his newfound notoriety.] It is a very strange moment in my life. When I look in my inbox there are probably about 10 interview request. I look in my inbox there are probably about 10 interview requests. It would be nice to be able to spread that out over a lifetime and not just have this one period of intense interest and then fade back into obscurity.
Carson Block
[In November 2011 on Sino-Forest.] I'm happy to step up to the plate if they want to go to court.
Carson Block
[In November 2011.] You have to have conviction that because you're right, you'll be okay.
Carson Block
[In March 2012.] I always had a lot of disciplinary problems at school and teachers said I had a problem with authority. I have stepped on a lot of toes in my life but probably there’s a part of me that enjoys that.
Carson Block
[In March 2012.] Love Box was an accident – as I guess Muddy Waters was. But without that experience I definitely wouldn’t be where I am now.
Carson Block
[In March 2012.] I had a lot of friends in Shanghai who were also entrepreneurs, and after getting our asses kicked [financially], we saw another side of this place.
Carson Block
[In March 2012.] We were asking if we were crazy or if the rest of the world was crazy, because what the rest of the world thinks goes on [in China] doesn’t mesh with the reality we observed. We were asking if we were crazy or if the rest of the world was crazy, because what the rest of the world thinks goes on [in China] doesn’t mesh with the reality we observed.
Carson Block
[In April 2012.] I'm not a billionaire and I don't have $4 billion to pay Sino-Forest.
Carson Block
[In May 2012.] The deeper problem for both regulators and investors—the difficulty of knowing for sure what the financial state of a Chinese company actually is. Questionable audit practices are endemic in China, even when audits are conducted by large global accounting firms.
Carson Block
[In May 2012.] Clearing away regulatory turf wars will also make it possible to get at the root of the problem: insufficient auditing practices in China.
Carson Block
[In May 2012.] The reality of China Inc. is that auditors applying proper Western standards will often be short of business. Chinese companies often engage in a lot of complex financial practices that accountants in the West would never approve, and even simple tasks such as cash-balance verification can't be taken for granted. If an accounting firm were to refuse to sign off on audits of such companies, however, it would soon be out of work.
Carson Block
[In November 2012 on whether he would launch a hedge fund dedicated towards betting against companies.] It’s something we’ve thought about. The short answer is ‘maybe’.
Carson Block
[In November 2012.] The nice thing about our business model is that when we find problems, we communicate those to the market.
Carson Block
[In November 2012 on having met with hedge fund pioneer Michael Steinhardt several months prior.] He was saying, ‘I shorted more stock than anybody else alive. But net-net over the years, I am flat on my shorts.’
Carson Block
[In November 2012.] We generally approach the regulators now after we publish. It is a business for us but we also do believe that the presence of these companies is poisonous for the capital markets and we would like to see that cleaned up
Carson Block
[In December 2012.] Comparisons to Enron are overused, but in the case of Olam, the similarities really are uncanny. We believe that the single biggest factor in Enron’s collapse was its use of accounting techniques similar to Olam’s value gains.
Carson Block
[In December 2012.] We were asking if we were crazy or if the rest of the world was crazy, because what the rest of the world thinks goes on [in China] doesn’t mesh with the reality we observed.
Carson Block
[In December 2012.] Your biggest fear, when you short a stock, is a squeeze. And one way to get squeezed is to have a bunch of other people in the short so that when they try to cover, it pushes the stock up and you start losing money.
Carson Block
[In February 2013 on short-selling.] If you’re not prepared to do your homework there’s no place for you in this business.
Carson Block
[In February 2013.] One thing that’s true of investing whether you’re on the long side or short side: You could be right, but still not make money. That happens occasionally.
Carson Block
[In February 2013 on short-selling.] It’s a very tough game.
Carson Block
[In February 2013.] On Herbalife we don’t have a view on the stock.
Carson Block
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