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Odd Lots

'The Assassin' Fahmi Quadir on How to Survive as a Short-Seller

31 min episode · 2 min read
·
Fahmi Quadir

Episode

31 min

Read time

2 min

Topics

Productivity, Health & Wellness, Investing

AI-Generated Summary

Key Takeaways

  • Short Seller Survival: The GameStop meme stock event of 2021 effectively destroyed institutional appetite for dedicated short funds — even managers who never touched those stocks lost allocator support. To survive, short sellers have shifted from long-conviction thesis-building toward momentum-driven, earnings-catalyst timing, sizing into positions only after the narrative has already broken and momentum confirms the thesis.
  • Consumer Stress Indicators: Household debt servicing costs have reached 11% of income in the US, with significantly higher burdens for households carrying student loans. Quadir targets consumer-adjacent businesses with high funding needs, particularly leveraged roll-ups in consumer discretionary and healthcare services, where structural deterioration is masked by financial engineering and price-gouging dependent on loose regulation.
  • Fraud Detection Framework: Companies facing structural decline consistently turn to financial engineering and accounting manipulation to mask deteriorating fundamentals. The most reliable short signal combines sector-level structural pressure with behavioral analysis of management — specifically tracking what external pressures, beyond stock price, are causing executives to show psychological stress, as demonstrated in the Wirecard case.
  • AI Valuation Risk: Quadir draws a parallel between today's AI investment cycle and 1920s utility holding companies — layered financing structures where cash flows recycled between opaque entities manufactured artificial demand. She identifies a potential OpenAI IPO as a key informational catalyst that could force market repricing of AI-driven revenue assumptions currently embedded across the sector.
  • Korea Long Thesis: South Korea enshrined shareholder fiduciary duties into corporate law less than one year ago, and the KOSPI regulator now publicly names companies trading below book value. Third-generation chaebol owners, more globally oriented than predecessors, are incentivized to unwind depressed valuations previously engineered to minimize inheritance tax, creating a structural re-rating opportunity for overlooked mid-tier conglomerates.

What It Covers

Fahmi Quadir, founder of Safkhat Capital and known as "the assassin," explains how short selling has evolved since GameStop, why consumer debt and healthcare are her current short targets, and why she is launching her first-ever long fund focused on Korean corporate governance reform.

Key Questions Answered

  • Short Seller Survival: The GameStop meme stock event of 2021 effectively destroyed institutional appetite for dedicated short funds — even managers who never touched those stocks lost allocator support. To survive, short sellers have shifted from long-conviction thesis-building toward momentum-driven, earnings-catalyst timing, sizing into positions only after the narrative has already broken and momentum confirms the thesis.
  • Consumer Stress Indicators: Household debt servicing costs have reached 11% of income in the US, with significantly higher burdens for households carrying student loans. Quadir targets consumer-adjacent businesses with high funding needs, particularly leveraged roll-ups in consumer discretionary and healthcare services, where structural deterioration is masked by financial engineering and price-gouging dependent on loose regulation.
  • Fraud Detection Framework: Companies facing structural decline consistently turn to financial engineering and accounting manipulation to mask deteriorating fundamentals. The most reliable short signal combines sector-level structural pressure with behavioral analysis of management — specifically tracking what external pressures, beyond stock price, are causing executives to show psychological stress, as demonstrated in the Wirecard case.
  • AI Valuation Risk: Quadir draws a parallel between today's AI investment cycle and 1920s utility holding companies — layered financing structures where cash flows recycled between opaque entities manufactured artificial demand. She identifies a potential OpenAI IPO as a key informational catalyst that could force market repricing of AI-driven revenue assumptions currently embedded across the sector.
  • Korea Long Thesis: South Korea enshrined shareholder fiduciary duties into corporate law less than one year ago, and the KOSPI regulator now publicly names companies trading below book value. Third-generation chaebol owners, more globally oriented than predecessors, are incentivized to unwind depressed valuations previously engineered to minimize inheritance tax, creating a structural re-rating opportunity for overlooked mid-tier conglomerates.

Notable Moment

Quadir reveals that Wirecard's collapse was preceded by a behavioral signal most analysts missed: the arrest of a close associate of cofounder Jan Marsalek triggered visible psychological deterioration in leadership — within six weeks, two billion dollars was declared missing and the company collapsed entirely.

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Episode Transcript

Odd Thoughts is brought to you by VanEck. For years, investors basically forgot about real assets, energy, gold, and infrastructure, but look at what's driving markets now. Central banks loading up on gold, massive CapEx cycles, currencies doing weird things, these assets are at the center of it. Racks, the VanEck real assets ETF, is an actively managed one stop shop for real assets spanning gold, commodities, natural resource equities, and more. Go to vanek.com/raaxpod to learn more fun disclosures later in this episode. Small businesses are the pulse of every community. They bring people together, create opportunities, and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com/business. Chase for business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank, NA. Member, FDIC. Copyright, 2026. JPMorgan Chase and Company. Find home wherever you roam at Sonesta ES and Simply Suites, where longer stays feel comfortable, flexible, and easy. Stretch out and enjoy spacious accommodations and home like amenities designed to help you settle in and stay productive or relaxed for however long you need. And when you're a Sonesta Travel Pass member, staying at Sonesta ES and Simply Suites means earning points toward free nights, upgrades, and more with every eligible stay. Go to senesta.com to book your stay and unlock the best rates with Senesta travel pass. Here today, roam tomorrow. Join now at senesta.com. Terms and conditions apply. Bloomberg Audio Studios. Podcasts, radio, news. Hello, and welcome to another episode of the Odd Lots podcast. I'm Tracy Alloway. And I'm Joe Weisenthal. Joe, I have a soft spot for short sellers. I think what they do is sort of sometimes similar to journalism. Right? You're trying to root out a particular story about a specific company and bring it to light, I guess. And I always wanted to talk to this particular short seller. She's kind of famous Yeah. In the space. I think she's one of the few short sellers, maybe, who's been in a Netflix documentary. More than one, I think, at this point. No. It's it's pretty like, I I totally agree with you about short sellers. I mean, I think, like, when you look at the broad history of markets, so particularly, you know, US markets over the last several decades, decades, they basically go up, and there's a lot of money to be made by just, like, you know, betting on the line go up. So I think you have to have, like, a sort of distinct personality type to think, oh, maybe there is some other interesting way to make money, in this market besides betting on stocks going up. But it's a phone it's an important service because one, …

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  • She identifies a potential OpenAI IPO as a key informational catalyst that could force market repricing of AI-driven revenue assumptions
  • Fahmi Quadir, founder of Safkhat Capital and known as 'the assassin,' explains how short selling has evolved since GameStop

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