Cadence Opportunities Fund

Betting on Zero directed by Ted Braun

This documentary was produced in 2016 by Ted Braun so strictly speaking is not a book….but it should be. As a reward for having read nearly 50 books on the Cadence list of 52 Books To Read Before Buying Your Next Stock you can have a week off by watching this nearly 2-hour long documentary.

This documentary follows the hedge fund manager Bill Ackman who has a one-billion-dollar short position on the US listed company Herbalife. Bill Ackman is convinced that Herbalife, an international nutritional products company is a pyramid scheme. In the opposite corner we have Carl Icahn, a famous activist investor who has taken the opposite side of this ‘bet’ and believed that when the Herbalife share price fell significantly it presented a buying opportunity.

So here we have two very well-known investors with large sums of capital at their disposal with equal and opposite views on a company that has come to notoriety, particularly over the last few years. And as they say, ‘This is what makes a market, people with equal and opposite views.’ There are not ‘more buyers than sellers or more sellers than buyers’ for Herbalife stock, the same amount of stock is bought and sold daily in Herbalife but the buyers and sellers have equal and opposite views on the future of the company.

Betting on Zero is compelling viewing and since the trade is currently ‘live’ we still don’t know the outcome. From an investor’s perspective it doesn’t get much better than this.