The long and short of shortselling with Jean Pierre Verster
Jean Pierre Verster, a well-known short seller and portfolio manager at Fairtree Capital, famously shorted African Bank and Steinhoff. The Financial Mail asks him about his best shorts, his decision to join Capitec’s board as a nonexecutive director, and Viceroy. Why is short selling important? Any market is a place where buyers and sellers meet. Just as buyers are allowed to borrow money to buy shares, sellers should be allowed to sell shares they don’t have to ensure equilibrium in the price discovery process. If this were not the case, buyers would overpower sellers and distort price discovery. What was your first short? I can’t remember the exact share, but at university I opened a CFD [contract for difference] account and started trading financial instruments on the long and short side. I doubled my money very quickly and became overconfident — and then lost it all. When I moved into equities, I understood that one should never bet too much from a position of overconfidence. Be...
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