Raphael Stevens

Hindenburg has been a standout performer among short sellers over the past few years, according to data.
Short selling is the practice of borrowing an asset and selling it on in the hope of buying it back at a lower price, thereby pocketing the difference and profiting from the decline of the asset’s value.
Short-selling is a controversial practice, since it involves making money from the decline of somebody else’s asset value.

NEW YORK – Jan. 6, 2023: Nate Anderson works at his desk. Anderson exposes corporate fraud and ponzi schemes through his company Hindenburg Research.
The Washington Post | The Washington Post | Getty Images

Hindenburg Research has established itself as one of the most powerful voices in public activist short-selling, hammering the share prices of multiple big name companies in recent years with its blockbuster reports.
The New York-based activist short-seller, founded by Nate Anderson, has also developed a reputation for its fearlessness, having gone after billionaires like Carl Icahn and Gautam Adani, along with regularly launching big public short bets and serious allegations despite the potential minefield of litigation.

Short selling is the practice of borrowing an asset and selling it on in the hope of buying it back at a lower price, thereby pocketing the difference and profiting from the decline of the asset’s value.
In Hindenburg’s case, this is usually the shares of companies it deems to be houses of cards, or in the company’s words: “Popping bubbles where we see them.”
“With a knack for targeting high-profile companies, Hindenburg’s capacity to consistently produce high-quality, influential research stands in contrast to the, often ridiculously, demanding landscape for short-sellers,” Ivan Cosovic, managing director of data group Breakout Point, told CNBC via email.
Hindenburg has been a standout performer among short sellers over the past few years, according to Breakout Point’s data, regularly leading or appearing near the top of the firm’s annual list of notable achievers.

NEW YORK, NY – JANUARY 6: Nate Anderson in New York. Anderson exposes corporate fraud and ponzi schemes through his company Hindenburg Research.
The Washington Post | The Washington Post | Getty Images

Cosovic highlighted the “particularly remarkable” number of high-performing short calls the firm puts out annually. Hindenburg’s 10 targets in 2022 experienced an average share price decline of 42%, while its seven targets in 2023 notched an average plunge of 36%, it said.

In the first quarter of 2024, Hindenburg boasted two shorts among the top 10 best-performing short calls in the market, as of March 8: U.S. biotech Renovaro and Swiss-listed fintech Temenos.
Within the space of three days in mid-February, both companies became targets of Hindenburg’s infamous research reports, in which the firm names a short target and sets out its evidence.

NEW DELHI, India – Feb. 9, 2023: Members of Indian Youth Congress protesting against the Central government over the Adani issue at Indian Youth Congress Office, Raisina Road, on February 9, 2023 in New Delhi, India. Congress (IYC) staged a protest demanding a probe into the allegations of fraud made against the Adani group in the Hindenburg research report.
Hindustan Times | Hindustan Times | Getty Images

Both companies denied the allegations in Hindenburg’s reports, with Temenos saying in a statement that it “contains factual inaccuracies and analytical errors, together with false and misleading allegations,” and that the firm was not contacted for comment in advance.
On Friday, shares of Polish fashion retailer LPP plunged by around 30% as a result of Hindenburg’s latest attack, as it accused the Gdansk-headquartered company of continuing to make money in Russia despite promising to end operations there following the invasion of Ukraine in 2022. LPP dismissed the allegations as “part of an organised disinformation attack” seeking to reduce its share price.
Hindenburg says on its website that “while we use fundamental analysis to aid our investment decision-making, we believe the most impactful research results from uncovering hard-to-find information from atypical sources.”
These situations include accounting irregularities, bad actors in management or key service provider roles, undisclosed related-party transactions, illegal or unethical business or financial reporting practices, or undisclosed regulatory, product or financial issues.
Controversial practice
Breakout Point has tracked 74 Hindenburg short bets it has opened since 2017. Of the 65 positions the company has closed out, 53 saw the target’s share price decline, thereby yielding gains for Hindenburg.
Of the nine short positions currently open, seven of the targets are in the red, two of which have fallen almost to zero.
Short-selling is a controversial practice, since it involves making money from the decline of somebody else’s asset value. Retail investors have mounted campaigns to squeeze hedge funds with short positions against certain assets by buying them en masse, in order drive up the value and force the short-sellers to buy back the shares at a loss or risk losing more money for their clients.
The most famous example of this was the January 2021, when retail traders sent shares of brick and mortar games retailer GameStop soaring with major ramifications for financial markets.

Biggest hits
One of Hindenburg’s biggest recent campaigns centered on a collection of businesses owned by Indian billionaire Gautam Adani.
In January 2023, Hindenburg published a report accusing Adani Group companies of “brazen stock manipulation and accounting fraud.”
The allegations caused tens of billions of dollars to be wiped from the various Adani companies’ stock values and sparked an investigation from the Securities and Exchange Board of India. Adani Group released a 413-page response denying the allegations and threatening legal action.
Gautam Adani’s net worth fell by $6 billion overnight, but the conglomerate and his personal fortune have since recovered, with Adani Group’s market cap more than doubling from the lows reached on the back of the short attack.

In May last year, Hindenburg went after famed activist investor Carl Icahn’s Icahn Enterprises, alleging “inflated” asset valuations and excess leverage, also triggering a plunge in the company’s share price from which it has yet to meaningfully recover.
Icahn hit back at Anderson’s firm, claiming the report was created “solely” to generate profits on its short position at the expense of Icahn Enterprises’ long-term stakeholders.
Though Icahn and Adani just about weathered the storm, other Hindenburg attacks have uncovered existential faults in target companies.
For example, in 2023, the company uncovered what the U.S. Securities and Exchange Commission later deemed fraud at private investment firm Nanban Ventures and Nigerian fintech conglomerate Tingo Group.
Cosovic highlighted that while Hindenburg is best known for its public short-selling reports, it also plays a significant whistleblowing role in extending its scrutiny to private entities, in some cases.
The firm has also recently spotlighted a series of high-flying Chinese-headquartered companies listed on the Nasdaq, alleging that the tech-heavy New York exchange is permitting “rampant, open fraud.” All the companies involved have denied the allegations.
“I believe this ongoing Nasdaq endeavor nicely highlights Nate Anderson’s commitment to transparency and integrity in financial markets,” Cosovic said.
“Hindenburg Research has injected a breath of fresh air into the domain of public short-selling, revitalizing a sector that found itself beleaguered by SEC investigations and hate from retail investors.” More

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The window for interest rate cuts may be closing.
On the eve of the Federal Reserve’s two-day policy meeting, Wall Street forecaster Jim Bianco believes the central bank will likely stay on hold until next year.

“I’m in the camp that the Fed does not change policy in the summer of an election year,” the Bianco Research president told CNBC’s “Fast Money” on Monday. “If they don’t pull the trigger by June, then it’s November [or] December at the earliest — only if the data warrants it. And, right now, the data isn’t warranting it.”
For Fed Chair Jerome Powell to cut this spring, the economy would have to dramatically weaken, according to Bianco.
“The economy is too strong right now,” he said. “It’s in a ‘no landing phase’ as we like to call it. It’s not a Boeing plane. There’s no parts falling off of it, and it’s just continuing to move along at probably a 2.5% to 3% pace.”
This week’s Fed meeting comes almost exactly two years after policymakers started their rate hike campaign.
“It looks like we’re probably bottoming on inflation at around 3%,” he said. “That’s not 2[%], and the Fed has made it very clear that they need confidence for going to 2[%]. And, we’re not getting that.”

It appears Wall Street may be on notice. The CME FedWatch tool showed on Monday expectations for a quarter point rate cut in June dropped below 50%.
Plus, Treasury yields are climbing higher. The benchmark 10-year Treasury Note yield is yielding 4.328% —its highest level in a month and is inching closer to a four-month high.
“They may even go higher,” added Bianco. “It’s going to be the reality of inflation.”
In January, Bianco told “Fast Money” the 10-year yield would hit 5.5% this year. It’s a level not seen since May 2001.
He still believes the backdrop will keep the yield trending higher.
“I don’t think that is a consensus view in the marketplace,” Bianco said. “When we were at 5% in October, we were throwing up 3% growth rates in the economy, and it was able to handle that level of interest rates just fine.”
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Vladimir Putin, Russia’s president, and Ebrahim Raisi, his Iranian counterpart, have several things in common. Both belong to a tiny group of leaders personally targeted by American sanctions. Even though neither travels much, both have been to China in recent years. And both seem increasingly fond of one another. In December they met in the Kremlin to discuss the war in Gaza. On March 18th Mr Raisi was quick to congratulate Mr Putin for his “decisive” election victory.For much of history, Russia, Iran and China were less chummy. Imperialists at heart, they often meddled in one another’s neighbourhoods and jostled for control of Asia’s trade routes. Lately, however, America’s actions have changed the dynamic. In 2020, two years after exiting a deal that limited Iran’s nuclear programme, Uncle Sam reimposed an embargo; more penalties were announced in January this year, to punish Iran for supporting Hamas and Yemen’s Houthi rebels. Russia fell under Western sanctions in 2022, after invading Ukraine, and they were recently tightened. Meanwhile, China faces restrictions of its own, which could become much more stringent if Donald Trump is elected president in November. United by a common foe, the trio now vow to advance a common foreign policy: support for a multipolar world no longer dominated by America. All see stronger economic ties as the basis for their new alliance.China has promised a “no limits” partnership with Russia, and signed a 25-year, $400bn “strategic agreement” with Iran in 2021. All three countries are joining the same multilateral clubs, such as the BRICS. Bilateral trade between them is growing; plans are being drawn up for tariff-free blocs, new payment systems and trade routes that bypass Western-controlled locations. For America and its allies, this is the stuff of nightmares. A thriving anti-Western axis could help foes dodge sanctions, win wars and recruit other malign actors. The new entente involves areas where links are already strong, others where collaboration is only partial and some unresolved questions. What might the alliance look like in five to ten years?Start with booming business. China has long been a customer of petrostates, including Iran and Russia. But these two also used to sell lots of oil to Europe, which was close to Russia’s fields and easy to reach from the Gulf. Since Europe started snubbing them, China has been buying barrels at bargain prices. Inflows from Russia’s western ports have risen to 500,000 barrels a day (b/d), up from less than 100,000 pre-war, reckons Reid l’Anson of Kpler, a data firm. In December that pushed imports of Russian crude to 2.2m b/d, or 19% of China’s total, up from 1.5m b/d two years ago. In the second half of last year Iran’s exports to China averaged 1m b/d, a 150% rise from the same period in 2021.image: The EconomistWhereas Western sanctions allow anyone outside the G7 to import Russian oil, the Iranian energy industry is subject to so-called secondary sanctions, which restrict third countries. Since 2022, however, the Biden administration has relaxed enforcement—willing to see rules broken if it means lower prices. The result has been a surge in Chinese imports, with the beneficiaries not China’s state-owned firms, which could one day be exposed to sanctions, but smaller “teapot refineries” with no presence abroad. As a bonus, China also gets cheap gas from Russia: imports via the Power of Siberia pipeline have doubled since Mr Putin’s invasion of Ukraine.Russia and Iran have little choice but to sell to China. In contrast, China is only subject to restrictions on imports of Western technology—it does not face finance bans or trade embargoes. Thus it can, and does, buy oil from other countries, which gives it the upper hand in negotiations. China gets Russian and Iranian supplies at a discount of $15-30 on the global oil price, and then processes the cheap hydrocarbons into higher-value products. The production capacity of its petrochemicals industry has grown more in the past two years than that of all other countries combined since 2019. China also cranks out enormous volumes of refined-oil products.Trade not aidBoosting commodity trade between the three countries was always going to be the easy bit. Everyone wants oil; once on a ship, it can be sent anywhere. Yet China has an informal policy of limiting dependence on any commodity supplier to 15-20% of its total needs, meaning that it is close to the maximum it will want to import from Iran and Russia. Although the trade is still enough to provide the two countries with a lifeline, it is helpful only if they can spend the hard currency earned on importing goods. Hence the ambition to develop other types of trade.image: The EconomistChina’s exports to Russia have duly soared. As covid-19 restrictions strangled its economy, China sought to compensate by boosting manufacturing exports. Instead of shoes and t-shirts, it tried to sell high-value wares, such as machinery and mechanical devices, for which Russia acted as a test market. Last year the biggest importer of Chinese automobiles was not Europe, a big electric-vehicle buyer, but Russia, which purchased three times as many petrol cars it did as before the war.Purchasing-manager surveys show that Iranian companies are constantly short of “raw materials”, a category including both sophisticated wares, like computer chips, and more basic ones, such as plastic parts. This hampers Iran’s manufacturing industry, which is as large as its petroleum sector. Yet China exports few parts and just 300-500 cars a month to Iran, compared with 3,000 or so to neighbouring Iraq. Not many of China’s manufactured-goods exporters, which sell a lot to the West, are brave enough to risk American retribution.In theory, more business with Russia could help Iran. The two countries supply each other with useful goods. Since 2022 Iran has sold Russia drones and weapons systems that are causing damage in Ukraine—its first military support for a non-Islamic country since the revolution in 1979. Early this year Iran also sent Russia 1m barrels of crude by tanker, another first. But sanctions make deeper ties tricky. Although Russia stopped releasing detailed statistics in 2023, ship-traffic data in the Caspian Sea show only a modest rise since 2022, when the country’s leaders set an ambitious target to boost bilateral trade.Limited trade between Iran and Russia means they lack common banking channels and payment systems. Despite government pressure, neither SPFS (Russia’s alternative to SWIFT, the global interbank messaging system) or Mir (Russia’s answer to American credit-card networks) is widely used by Iranian banks. Efforts to de-dollarise trade led to the creation of a rouble-rial exchange in August 2022, but transaction volumes remain low.To resist sanctions in the longer run, Iran and Russia also need investment—the weakest area of co-operation at present. China’s stock of foreign direct investment in the Islamic Republic has been flat since 2014, even as it has poured money into other emerging economies, and at roughly $3bn remains puny for an economy of Iran’s size. Deals agreed during the last visit of Iran’s president to Beijing, which could be valued at $10bn at most, are dwarfed by the $50bn China pledged to Saudi Arabia, Iran’s great rival, in 2022.Although China remains involved in Russian projects such as Arctic LNG, a gas-liquefaction facility in the country’s north, it has not snapped up assets dumped by Western firms, notes Rachel Ziemba of CNAS, a think-tank, nor backed new ventures. Russia had been expecting China to bankroll the Power of Siberia 2 pipeline, due to carry 50bn cubic metres of gas to the Middle Kingdom when complete—almost as much as Russia’s biggest pipeline used to deliver to Europe. Without China’s support, the project is now in limbo.A little help from your friendsThe alliance has already achieved something remarkable: saving its junior members from collapse in the face of Western embargoes. But has it reached its full potential? The answer depends on the ability of its members to surmount external and internal obstacles.Various forums aim to promote co-operation and cross-border investment. Last July Iran became the ninth member of the Shanghai Co-operation Organisation, a China-led security alliance that also includes Russia. In December it signed a free-trade agreement with the Russia-led Eurasian Economic Union, which covers much of Central Asia. In January it joined the BRICS, an emerging-market group that includes both China and Russia.These get-togethers give the trio more chances to talk. At recent summits, Iranian and Russian ministers have revived negotiations to extend the International North-South Transport Corridor (INSTC), a 7,200km route connecting Russia to the Indian Ocean via Iran. At present Russian grain must travel to the Middle East through the NATO-controlled Bosporus. The proposal, which includes a mixture of roads, rail and ports, could turn Iran into an export outlet for Russia.Iran and Russia’s bureaucracies have relatively little experience of working with one another, and the amount of investment required is daunting: the Russia-backed Eurasian Development Bank estimates it to be $26bn in Iran and Russia alone. Mustering such funding, in two countries not known for investor friendliness, would be hard at the best of times, let alone under sanctions. Still, the idea is gaining traction. On February 1st envoys discussed the next steps for the Rasht-Astara railway, a $1.6bn project that could ease cargo transit in northern Iran. Last year Russia used part of the INSTC to move goods to Iran by rail for the first time.The more serious problem is that Iran and Russia’s economies are too similar to be natural trading partners. Of the top 15 categories of goods that each exports, nine are shared; ten of their 15 biggest imports are also the same. Only two of Russia’s 15 most wanted goods count among Iran’s top exports. Where Iran does have demand gaps Russia could fill, such as in cars, electronics and machinery, Russia’s production capacity is constrained.With gains from trade curtailed by various sanctions, the relationship between the two countries will instead be a competitive one, particularly when it comes to energy exports. Since the West imposed an embargo on Russia’s oil, the country has been vying with Iran to win a bigger share of China’s imports, resulting in a price war. It is a battle that Iran is losing. Russia is a bigger oil producer and its energy is not subject to secondary sanctions. Some of its crude can also be piped to China, a cheaper option.Having the upper hand makes Russia uninterested in offering assistance to its allies. Early in the war, Ukraine’s supporters feared that Russia and Iran would team up to evade sanctions. Instead, Russia developed its own “shadow” fleet of tankers and gave no access to the Iranians, says Yesar Al-Maleki of MEES, a research outfit. Iran has sought Russian funds and technology to tap its giant gas reserves; Russia has provided little help so far.In other areas, China has become a competitor to Iran. Until recently, the Islamic Republic’s sizeable manufacturing base was a source of resilience. The country could take advantage of a devalued currency to sell nuts and toiletries, says Esfandyar Batmanghelidj of Bourse & Bazaar Foundation, another think-tank. Its hope, in time, was to climb the value chain, exporting air-conditioning units and perhaps even cars. China is dashing such dreams. As it shifts towards higher-value exports, it is flooding Iran’s target markets with cheaper, better versions of these goods.The West seems to have little appetite for wholesale secondary sanctions. But existing measures will continue to cause trouble. In December America announced penalties for anyone dealing with Russian firms in industries including construction, manufacturing and technology. These look similar to those it imposed on Iran in 2011, which were later suspended in 2015, after the nuclear deal was signed. Before the suspension, the measures caused Iran’s imports from China to plummet. There is evidence that some Chinese banks are already dumping Russian business.Although these new sanctions do not target Russia’s energy sector, they could hinder Russia’s oil trade with customers other than China if banks react by pausing business with the energy giant. Since October America has also imposed sanctions on 50 tankers that it says breach sanctions on Russia; around half of them have not loaded Russian oil since. All this is making exports to China both more necessary and more difficult for Russia, which is bound to increase competition with Iran. America could fan the flames further by leaning on Malaysia to inhibit oil smuggling in its waters, choking off Iranian flows. And China itself is under growing scrutiny. In February the EU announced sanctions on three Chinese firms it reckons are helping Russia.The scareometerAt this stage, then, the anti-Western entente is worrying but not truly scary. How will it develop over the years and decades to come? The likeliest scenario is that it remains a vehicle that serves China’s interests, rather than becoming a true partnership. China will use it for as long as it can reap opportunistic gains, and stop short of giving it proper wings. China will decline to put weight behind alternative trade routes or payment systems, not wanting to put at risk its business in the West.Yet that might change if America, perhaps during a second Trump presidency, attempts to force China out of Western markets. With nothing more to lose, China would then put far greater resources into forming an alternative bloc, and would inevitably attempt to build on existing relationships and broaden its alliances. Junior partners may not be pleased: their manufacturing industries would suffer as China redirected its exports. America would also suffer: its consumers would pay more for their imports, and in time its leaders would see the first serious challenge to their dominance of the global trading system. ■ More

Investing smartly doesn’t have to be complicated, according to financial experts.
Target-date funds are the easiest way for novice long-term investors to get started, experts said.
Target-allocation funds or global market index funds are other easy entry points, they said.

Kate_sept2004 | E+ | Getty Images

Investing can seem overly complicated, and that complexity may paralyze Americans into doing nothing.
But investing — and doing so smartly — doesn’t have to be hard. In fact, getting started can be relatively easy, according to financial experts.

“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ,” Warren Buffett, chair and CEO of Berkshire Hathaway, famously said.
For many people, investing is a necessity to grow one’s savings and provide financial security in retirement. Starting early in one’s career benefits the investor due to a longer time horizon for interest and investment returns to compound.
While appropriate long-term goals may differ from person to person, one rule of thumb is to save roughly 1x your salary by age 30, 3x by 40 and ultimately 10x by 67, according to Fidelity Investments.

A ‘fabulous, simple solution’ for beginners

Target-date funds, known as TDFs, are the simplest entry point to investing for the long term, according to financial pros.
“I think they’re a fabulous, simple solution for novice investors — and any investor,” said Christine Benz, director of personal finance and retirement planning at Morningstar.

TDFs are based on age: Investors choose a fund based on the year in which they aim to retire. For example, a current 25-year-old who expects to retire in roughly 40 years may pick a 2065 fund.

These mutual funds do most of the hard work for investors, like rebalancing, diversifying across many different stocks and bonds, and choosing a relatively appropriate level of risk.
Asset managers automatically throttle back risk as investors age by reducing the share of stocks in the TDF and raising the exposure to bonds and cash.

How to pick a target-date fund

TDFs are a good starting point for “do nothing” investors who seek a hands-off approach, said Lee Baker, a certified financial planner and founder of Apex Financial Services in Atlanta.
“That’s the easiest thing for a lot of people,” said Baker, a member of CNBC’s Advisor Council.
Investors need only choose their TDF provider, their target year and how much to invest.

Benz recommends selecting a TDF that uses underlying index funds. Index funds, unlike actively managed funds, aim to replicate broad stock and bond market returns, and are generally cheaper; index funds (also known as passive funds) tend to outperform their actively managed counterparts over the long term.
“You definitely want a passive TDF,” said Carolyn McClanahan, a CFP and the founder of Life Planning Partners in Jacksonville, Florida.
Benz also advises investors seek out funds from among the biggest TDF providers, like Fidelity, Vanguard Group, Charles Schwab, BlackRock or T. Rowe Price.

Other ‘solid choices’ for novice investors

Investors who want to be a bit more hands-on relative to TDF investors have other simple options, experts said.
Some may opt for a target-allocation fund, for example, Baker said. These funds are like TDFs in that asset managers diversify among stocks and bonds according to a particular asset allocation — say, 60% stocks and 40% bonds.
But this allocation is static: It doesn’t change over time as with TDFs, meaning investors may eventually need to revisit their choice. They can determine which fund might be a good starting point by filling out an online risk profile questionnaire, Baker said.
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As another option, investors may instead opt for a global market index fund, an all-stock portfolio diversified across U.S. and non-U.S. equities, Benz said. As with target-allocation funds, these funds don’t de-risk as one ages.
“I think sometimes novice investors question the simple elegance of some of these very solid choices,” Benz said. “People crave something more complex because they assume it has to be better, but it’s not.”

Ask yourself: Why am I investing?

Young, long-term investors should generally ensure their fund — whether TDF or otherwise — has a high allocation to stocks, around 90% or more, said McClanahan, a member of CNBC’s Advisor Council.
Retirement investors under age 50 would likely be well-suited with a portfolio tilted mostly to stocks, with some cash reserves set aside in the event of emergencies like job loss or health issues, Benz said.

You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.

Warren Buffett
chair and CEO of Berkshire Hathaway

One caveat: Investors saving for a short- or intermediate-term need — maybe a house or car — would likely be better served putting allotted money in safer vehicles like money market accounts or certificates of deposit, McClanahan said.
The easiest place for long-term investors to save is a workplace retirement plan like a 401(k) plan. Those with an employer match should aim to invest at least enough to get the full match, McClanahan said.
“Where else do you get 100% on your money?” she said.
Investors who don’t have access to a 401(k)-type plan can instead save in an individual retirement account — another type of tax-preferred retirement account — and set up automatic deposit, McClanahan said.
TDF investors who save in a taxable brokerage account may get hit with an unexpected tax bill, experts said. Because TDFs regularly rebalance, there are likely to be transactions within the fund that trigger capital-gains taxes if not held in a tax-advantaged retirement account.

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