Lessons from Andrew Left

Andrew Left, the outspoken founder of Citron Research, has carved a controversial yet influential niche in the financial world. Renowned for his activist short-selling, Left has made a career of identifying and exposing what he deems to be overvalued or fraudulent companies. His detailed reports and candid commentary have moved markets, sparked debate, and offered a wealth of lessons for investors. While his methods have recently drawn legal challenges, his decades-long career provides a trove of insights into market dynamics, investor psychology, and the art of contrarian thinking.

On Short-Selling Philosophy and Strategy

On the core mission of Citron Research: "The goal of this website is and has always been to provide truthful information in an entertaining format to the investing public. Our goal has never been to engage in ‘gotcha’ journalism." [1]
On his fundamental approach: Left's strategy involves a "methodical approach that integrates fundamental analysis, sentiment evaluation, and scrutiny of market structure factors" to identify promising short-selling targets. [2]
On being a contrarian: Supporters value how he "offers a counterpoint to Wall Street's habitual optimism about company worths and operations." [2]
On the purpose of his reports: "My goal is to get a conversation started about a stock, about a company." [3]
On the nature of his work: "I've found more bad players than anyone else. Where's my White House visit?" [4]
On the evolution of his reports: "I look at some of the earlier Citron reports they were two, three pages long just laying out a simple thesis. And right now if you want to put out a good short report you have to really be strong." [5]
On the impact of his research: A Wall Street Journal analysis of 111 Citron short-sale reports from 2001 to 2014 found an average share-price decline of 42 percent in the year following his report. [6]
On his track record: "Fortunately for me, I've been more right than wrong."
On the changing landscape of short-selling: Left acknowledges that "short selling is a dying business," highlighting how retail investors have leveled the playing field. [7]
On the democratization of the market: "The market has become a lot more democratized partially because of activist short-selling and now even retail traders short stocks." [5]

On Market Dynamics and Investor Behavior

On meme stocks and market dynamics: "It's fun to go back into the fire. The market dynamics have changed and I'm not as exposed as I was." [7]
On the power of narrative: Speaking about Square's stock in relation to its Bitcoin business, he said, "it's a very small part of the business but it's a very large part of the narrative." [8]
On market sentiment: He has referred to the market being "drunk on Bitcoin nonsense."
On the danger of hype: In a report on Shopify, he called it "a company that has mastered the good old get rich quick scheme." [9]
On retail investors: He has cautioned retail traders who made profits on GameStop, "When you make your profits, make sure you put some away for the IRS. That money is not all your money." [10]
On market efficiency: "You can't artificially shove a stock down it just doesn't work like that the market's too efficient right now." [5]
On the psychology of shareholders: In the midst of the GameStop saga, he remarked, "I've never met shareholders that have Stockholm syndrome." [11]
On the evolution of traders: "I think traders have evolved over the past three years...and understand short selling and understand market dynamics." [11]
On the absurdity of valuations: Regarding Palantir, he stated, "It's become so absurd." [8]
On ignoring valuation metrics: "You can't be a big data company like Palantir and then tell investors to ignore big data, like looking at valuation metrics and multiples." [8]

On Specific Company Calls

On Valeant Pharmaceuticals: He famously called the company the "Pharmaceutical Enron." [6]
On his Valeant short: After his report, Valeant's stock plunged, and he later said, "I'm long for a trade," after the stock had collapsed. [12]
On Shopify: He released a report calling Shopify "a business dirtier than Herbalife." [6]
On his Shopify thesis: He alleged that Shopify was "selling them to people as opportunities to get rich quick." [9]
On GameStop: After covering his short at a significant loss, he said, "Covered the majority of the short in the $90s at a loss of 100%." [10]
On returning to the GameStop short: "Sometimes you go back in at the time as a situation...the fundamentals don't match up to the stock price." [11]
On Tesla: After being a vocal short, he reversed his position in 2018, stating in a report that the "story [is] too compelling to ignore." [13]
On his Tesla reversal: "I was the first Tesla critic to change tune on it and I took a lot of heat from it." [14]
On Tilray and the cannabis bubble: He called the stock's valuation a "joke" and referred to the company as a "stock operation" rather than a legitimate business.
On Palantir's valuation: He called the company "beyond overvalued." [8]

On His 7 Precepts for Shorting

In an interview with Business Insider in May 2018, Andrew Left outlined his seven key principles for short-selling. [15]

1. Keep an open mind. [15]
2. Only short profitable companies. [15]
3. Maintain a wide network of potential sources. [15]
4. Don't panic if the stock doesn't cooperate right away. [15]
5. Never give up on an idea. [15]
6. Be aware you will be swimming against the natural bias of markets. [15]
7. Be intellectually honest. [15]

On Personal Philosophy and the Business of Investing

On his identity: "I've always been long as well I've just been known for writing activist short selling newsletters doesn't mean I don't buy stocks that'd be foolish not to." [5]
On risk tolerance: "Everyone has to trade with their own risk tolerance i can't tell you how to trade i wish I had Warren Buffett's patience." [16]
On the personal toll of his work: After facing harassment during the GameStop saga, he stated, "But what I never did was I never got personal, I never got nasty, and I never threatened a corporate executive, their family, or any shareholders. It was always business." [10]
On social media: "I just deleted my Twitter one day i mean Twitter is so filled with hate and meanness and maybe I just as I got older I just didn't have that in my belly anymore." [5]
On transparency: "I was one of the first people that came out there like 20 some odd years ago and said here I am here's my name I'm not hiding behind anything and here's what your company's all about." [5]
On his investing style: "We want to bring investors stocks that they can make five, or ten times their money on." [17]
On the difficulty of shorting: "It's so hard to short them." [18]
On the simplicity of great long-term investments: He once mused that if he had simply invested in companies his family couldn't live without, like Apple, Amazon, and Chipotle, the returns would have been phenomenal. [18]
On the informational advantage of a short-seller: "When you're an activist short seller, your informational advantage over the street is around a half an hour." [4]
On the effort involved in his research: "For three months, while you were at your kid's baseball game, I was investigating a fraud. While you were watching Netflix with your wife, I was up all night working." [4]
On his legal battles: "Despite being sued by multiple companies for the reports he has released, Left claims he has never lost a case in the United States." [6]
On the shift in his public focus: In 2021, Left announced that Citron Research would no longer publish short-selling reports and would instead focus on long-side opportunities. [17]
On his legacy: "Citron Research has been publishing columns for over 17 years, making it one of the longest-running online stock commentary websites. With over 150 reports, Citron has amassed a track record of identifying fraud and terminal business models second to none among any published source." [1]

Learn more:

Lessons from Andrew Left

On Short-Selling Philosophy and Strategy

On Market Dynamics and Investor Behavior

On Specific Company Calls

On His 7 Precepts for Shorting

On Personal Philosophy and the Business of Investing

Written by Antoine Buteau

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