Sold Short : Uncovering Deception in the Markets [Hardcover]

Manuel P. Asensio (Author), Jack Barth (Author)

Book Description

ISBN-10: 0471383384 | ISBN-13: 978-0471383383 | Publication Date: April 15, 2001 | Edition: 1

A revealing expose by one of today's most successful and controversial speculators
Short-selling, or betting on a drop in the price of a stock, has been described by its many opponents as everything from shady to downright evil. And no one today personifies the practice better than short-seller extraordinaire Manuel Asensio. Though he has been branded in the press as a market saboteur, Asensio staunchly defends his practices, claiming that, above all, he is out to expose rampant fraud being perpetrated by unscrupulous stock promoters. Is Asensio a "Minion of Satan" as they say in the online chat rooms, or is he really a misunderstood guardian angel of free market capitalism? In this tell-all account, Asensio offers readers a lively narrative, peppered with unforgettable anecdotes such as the story of why he shorted Diana, General Nutrition, Solv-Ex, Turbodyne, and many other high-profile stocks. And he arms investors with proven techniques for reducing the inherent risks of short-selling while maximizing returns. Clearly, Asensio invites both praise and criticism, but his methodology works, and Sold Short is a compelling and fascinating read about this often mysterious side of the market--and one of the most controversial individuals behind it.
Manuel Asensio (New York, NY) is founder and Chairman of Asensio & Co., Inc. He has over twenty years of corporate finance and research experience. He has been featured in Business Week, the Wall Street Journal, Barron's, Fortune, Forbes, Worth, the New York Times, New York magazine, and the New Republic, among other leading national and international publications.

Editorial Reviews

Amazon.com Review

Sold Short is the story of Manuel Asensio, a successful but controversial securities broker whose claim to fame is aggressive short selling--a widely disparaged (and sometimes wildly profitable) investment technique that realizes success only if stocks decline in value. Since the larger financial community is overwhelmingly comprised of long sellers who profit when prices rise, the shorts' contrarian position is always at odds and usually portrayed as an unscrupulous, backdoor attack on all things good and holy. Asensio sees it quite differently, of course, and with the help of Jack Barth, he reveals how a young boy who barely escaped Cuba before the revolution could come to be viewed as the devil incarnate by corporate honchos and Wall Street analysts whose professional paths he has crossed. After explaining how his firm uncovered some of their "grossly overvalued" companies, and what happened when he bet against them in the market, Asensio details the process so interested readers can theoretically profit from similar moves. Some of the material here is much too technical to interest casual investors, and Asensio's philosophy will still be scorned by those who don't abide it. Fellow shorts and those interested in all the machinations of the market, though, should find it an absorbing and informative read. --Howard Rothman

From Publishers Weekly

Asensio is the most famous practitioner of an investment technique called short selling, in which one profits from a stock's decline. Although this practice has a bad reputation, Asensio argues that it is legal and even ethical. He often chooses to publish his research, issuing reports explaining precisely why his stocks should go down; this, along with his unmatched six-year record for spotting overhyped and fraudulent stocks, makes him very unpopular on Wall Street. His book offers amusing accounts of companies whose stock prices were irrationally buoyed by management's optimistic press releases (amusing, that is, to readers who didn't buy the stocks). Some companies had no products, others did not have the rights to the products they touted, and still others hawked failed drugs or previously discredited inventions. Readers' amusement will turn to concern, however, as the book documents the complicity of large institutions in these frauds. Asensio shows that the best-known investment banks praised these overvalued stocks, the best-known mutual funds bought them, skeptical business journalists wrote puff pieces, the stock exchanges allowed transparent manipulation and, in two cases, even the government helped perpetuate the frauds. Since he has already been (unsuccessfully) sued by many of the companies he discusses, Asensio can speak more frankly than publishers' lawyers usually allow; his no-nonsense writing style sets his book apart from the usual staid and pompous investment coverage. (May)Forecast: Asensio is a cult figure among some investors, and his book is fun to read; its skeptical approach to Wall Street hype should find a ready audience among the millions of investors who have recently lost money in the stock market and stock mutual funds.

Copyright 2001 Cahners Business Information, Inc.

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Product Details

• Hardcover: 240 pages
• Publisher: Wiley; 1 edition (April 15, 2001)
• Language: English
• ISBN-10: 0471383384
• ISBN-13: 978-0471383383
• Product Dimensions: 9.3 x 6.3 x 1 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 3.3 out of 5 stars  See all reviews (21 customer reviews)
• Amazon Best Sellers Rank: #1,224,081 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

27 of 28 people found the following review helpful:

3.0 out of 5 stars Average Investing book, June 1, 2002

By 

R. Spell "raspell" (Memphis, TN USA) - See all my reviews
(VINE VOICE)    (REAL NAME)   

Amazon Verified Purchase

This review is from: Sold Short : Uncovering Deception in the Markets (Hardcover)

I have no problem with the theory of short-selling although many investors do. I'm not a big believer that shorts squeeze companies nearly as much as long investors like to claim so I hoped to learn from the source.

Frankly, I'm disappointed for two reasons. First of all, Mr. Asensio doesn't really give good examples of selling short stock as an investment strategy EXCEPT as it relates to small overly promoted fraudulent stocks. I had hoped to learn financial analysis of when a stock should be shorted. Instead, this book focuses only on overly hyped companies run by stock promoters. Fair enough. But the positions in these smaller companies would be much harder to short. In addition, Mr. Asensio may have the time to study the small stocks and uncover these unethical stocks, but it's really not pertinent to the average investor and therefore had minimal value to me.

My second problem with the book is the grandioise self-serving nature of the narrative. Ok, the writer is from Cuba, works his way into the investing business but never feels like he's part of the "club". So he sticks it in their ear by being a short seller. But there is always an explanation about the bad things said about him. And in the last chapter, he attempts to explain away the securities violations he has been charged with and agreed to pay.

This book starts ok but quickly gets very boring and has nothing of value for a person trying to learn about short-selling. I wouldn't recommend this book unless you have a specific interest in bogus stock promotions.

35 of 42 people found the following review helpful:

5.0 out of 5 stars Character is what you do when no one is looking, July 1, 2001

By 

Eugene A Jewett "Eugene A Jewett" (Alexandria, Va. United States) - See all my reviews

This review is from: Sold Short : Uncovering Deception in the Markets (Hardcover)

This book covers the anatomy of various stock promotions and it takes no prisoners. It implicates company managements', brokers, analysts, the financial press, the government regulators, the industry's self-regulators, and the corporate finance departments of all firms issuing stock to the public. It is dead-on accurate and a wonderful addition to the rich trove of books on Wall Street. Asensio provides an invaluable service to the public by going through the mechanics of short selling, street name stock, stock held in safe keeping, rule 504 Reg. D, Rule 144 and 145, accounting artifices, offshore rules and manipulations, and all the other techniques that shysters, and those who merely want to mislead you until times and circumstances improve, use. Too often you the investor end up as the sheep and the other guys have the shears and not so coincidentally your money.

If the SEC wanted to do something productive instead of engaging in its ponderous, bureaucratic, expensive, ham-handed approach to protecting small investors through policing capital markets, it should require that this book be sent at government expense to everyone who opens an account with a brokerage firm. It should also run ads in as many financial publications as possible so that the widest number of investors will have a chance to learn of its existence. The government wastes enormous amounts of money trying to find solutions to problems in a "trade-off of risks" world. Why not cut to the chase and opt for efficiency?

Speaking as someone who once wrote a white paper on how stock frauds are perpetrated, for a famous financial letter writer, I will tell you that this is without a doubt the best book on the subject. All stock brokers should have it as required reading in their training classes and they should be tested on it with some kind of an essay examination, perhaps 25-50 pages.

The SEC gleans correctly that many people lose their money betting on stocks because they want to hit a home run or to get rich quick. This isn't news it's why Las Vegas has so much traffic. It's why people bet the ponies, that and the addictive emotional rush it provides. But for the thinking man, who's a bit of a dreamer and an idealist, this book would save vast sums of time, money, anguish and agonizing self-reappraisal.

Full disclosure was the raison d'être for one of the two principle securities acts enacted in the early 30's by the FDR administration. It was meant to curb stock market abuses perpetrated in the 20's such as stock manipulations aided by "pools" of managed money. This private management of particularly small investor money later reappeared as the heavily regulated mutual funds industry. This spawned the mutual fund holding company act of 1940, and so on and so forth. Since that time we have seen the rise in power of the SEC, the NASD and of the various state securities commissioners. At every step the promoters find new ways to shear the sheep as regulators are always behind the curve. Like all regulators they calculate the cost of investor risk, but fail to calculate the cost of their regulatory policies. This book does what they should be doing. They should "contract out" to guys like Asensio who would then be provided financial incentive to do this job government can't efficiently and effectively do.

If you're a contemplative investor this is a must read. Buy it.

12 of 15 people found the following review helpful:

5.0 out of 5 stars Uncovers the sleazy self dealing on Wall Street, July 28, 2001

By 

Michael Kolesnik "runner_in_the_rockies" (Los Gatos, CA United States) - See all my reviews
(REAL NAME)   

This review is from: Sold Short : Uncovering Deception in the Markets (Hardcover)

This book hits hard, naming names, dates, and connections. After reading this you will wonder why these people that are detailed in the book are not in jail. For the most part, historical info as detailed in the book is still available. I went to the SEC site and looked up 4 of the mentioned companies and whoa, all the filings are there. Read them yourself, they are free to the public. There are companies out there who make nothing, sell nothing, and their only source of income is selling (scamming) stock. Asensio unmasks a few of them and it's like stirring up a hornet's nest.
The book itself is fun and reads like a mystery, you don't get bored. He has some personal history which explaines where he came from. He does do a little cheerleading but it should be expected. Asensio and his small crew take on the Giants of Wall Street, wage battle, and sometime win. Along with "The Predators Ball" this book is a must read for new or experienced stock investors.