This morning I noticed an article on Seeking Alpha by Alan Ginsburg making the case for shorting Joseph A Banks (JOSB). The writer makes a good case that the company’s financial statements are untrue and that a conflict-driven management team has at times “looted” the company. We have no position in JOSB and no plans to take one. I was simply reminded of Marc Cohodes, a passionate short seller (they usually are) who in early 2008 made the case at a presentation I attended that JOSB was a sham and was going to collapse. Marc was similarly convincing and had evidently done his homework. Sadly, though, in 2008 his short positions blew up on him during Lehman’s bankruptcy (you may recall a temporary ban on shorting financials at that time which caused a brief but sharp rally). It should have been his year, of all years. But it wasn’t.
Early last year I noted that Marc Cohodes had turned his back on Wall Street to run a chicken farm. It was one of the less likely outcomes of the 2008 Crash. We certainly wouldn’t own JOSB, and we don’t short individual stocks so my only involvement with JOSB will be to occasionally buy a pair of socks there. I haven’t so far been seduced by the “Buy One, Get Two Free” pitch for their suits. But if they do eventually collapse and Alan Ginsburg is right, someone else was on to the story already, if rather too early.