Three final lessons on shorting; Executive Integrity and Accounting Irregularities; Argentina inflation; Ushuaia, Argentina

1) Continuing where I left off in yesterday's e-mail, I'm sharing slides from my presentation on "Lessons From 15 Years of Short Selling"...

The slides below have three final lessons:

2) No surprise here – LOL!

A clever researcher, Luo Jianchuan of Luiss University in Italy, examined CEOs who were cheating on their spouses – revealed when extramarital affairs website Ashley Madison was hacked in 2015, exposing the names of its users. He then looked at the companies helmed by these CEOs and discovered that they were 69% more likely to restate earnings and were also more likely to be sued for securities fraud. Executive Integrity and Accounting Irregularities. Excerpt:

This paper uses paid membership to a website facilitating extramarital affairs as a proxy for a lack of integrity and finds that when executives lack integrity, their firms' financial statements are more likely to be restated. The likelihood of restatement is higher when executives are CEOs. Executives attempting to disguise their membership to the website mitigate the likelihood of restatement, but mitigation is qualified. Restatements cluster around a few issues, with executive compensation being one of the strongest. Executives who lack integrity also contribute to ineffective internal controls, material weaknesses, and more security lawsuits, but do not affect profitability or other discretionary choices. When executives' lack of integrity is revealed, the stock price of these executives' firm declines. Their careers, however, do not appear to be affected.

3) This certainly puts U.S. inflation in perspective: It has long been a problem here in Argentina, but it has really skyrocketed in the past year to 92% annualized last month!

Check out this chart of Argentina's inflation rate over the past decade:

4) Greetings from Ushuaia, Argentina, the bottom of the earth! We arrived Monday night and are spending two days here before boarding our boat tomorrow for a 12-day trip to Antarctica.

Yesterday we visited Tierra del Fuego National Park, In the morning, we rafted down a gentle river to the ocean (the Beagle Channel), ending at the terminus of the 11,090-mile Pan-American highway, which extends all the way to Alaska.

In the afternoon, we hiked five miles along the coast.

As you can see from these pictures (I posted more on Facebook here), the scenery was spectacular!

As I do every day in Central Park walking our dogs, on the hike I picked up every piece of trash I saw (over 200, I would guess) – enough to almost fill this trash can:

Best regards,

Whitney

P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.