Hindenburg: The Highs And Lows
Nathan Anderson and Hindenburg are examples of unconventionality, grit and thinking outside experience.
“Someone once told me that at a certain point, a successful career becomes a selfish act.”
Nathan Anderson, founder of Hindenburg, is disbanding the renowned short activist research firm. What a way to drop the mic.
Since the firm was established in 2017, Hindenburg has made headlines and often polarised the opinions of market participants on the way. Short selling is tough. Short reporting is tougher.
It is an area of finance that has often been shunned by Wall Street, with many citing that these reports are only for self-interest purposes to benefit an open position. However, short selling has served its purpose as a very important contribution to the proper functioning of the capital markets and management of market euphoria. And there have been few that have done it to the extent that Hindenburg achieved.
In January 2023, Anderson garnered significant international attention by publishing a report that accused Adani of orchestrating what he termed “the largest con in corporate history.” At that time, the Indian billionaire was ranked as the world’s fourth-richest individual according to the Bloomberg Billionaires Index. Following this, Anderson and Hindenburg swiftly released additional reports concerning Dorsey’s Block Inc. and Icahn’s Icahn Enterprises.
All three financiers and their respective enterprises vehemently refuted the assertions made by Hindenburg. Nonetheless, during that fiscal year, the trio experienced a significant decline in their collective wealth, amounting to nearly $99bn, while their publicly traded companies suffered a loss of market value totalling as much as $173bn.
It feels like an understatement to say that Hindenburg shook some empires:
His ascent occurred during a period when many of his contemporaries were experiencing a decline in performance, hindered by a prolonged bull market and the proliferation of passive investment strategies that rendered it challenging to adopt contrarian approaches.
Anderson’s letter, posted publicly on Thursday, stated that there was no specific reason for shutting the company down. However, it provides some valuable lessons for life and business. We wanted to share a few today.
Unconventionality
“When I started this, I doubted I was capable. I didn’t have a traditional finance background. None of my relatives are in this field. I went to a state school. I’m not a slick salesperson. I don’t know any of the right clothes to wear. I can’t play golf. I’m not some superhuman that can function on 4 hours of sleep. In most of my jobs I was a good worker but mostly looked over.”
Success does not require fitting into conventional moulds or having traditional qualifications. Despite lacking a prestigious background or stereotypical traits associated with success in finance, Anderson exemplifies the importance of determination, hard work, and individuality. It underscores that anyone, regardless of perceived disadvantages or differences, can achieve remarkable things by leveraging their unique perspective and persistence.
The Power of Grit
“It is very easy to succumb to negative thoughts and believe what others think of you, especially when things feel low. But it is possible to shatter all of that. I was passionate about this and I let that carry me forward despite my fears and insecurities.”
Passion and resilience serve as powerful tools in overcoming the obstacles of self-doubt and external negativity that many may encounter throughout their lives. It’s not uncommon for individuals to internalise criticism from others, allowing their insecurities to cloud their judgment and sap their motivation. However, when we concentrate on our core values and what truly matters to us, we harness a remarkable ability to move forward, even when faced with adversity. The journey is often fraught with challenges that can shake our confidence and make us question our abilities. It is during these trying times that our passion becomes a driving force, igniting our determination to persevere. Embracing our passions not only fuels our efforts but also reminds us of the reasons we set out on our paths in the first place.
Thinking Outside Experience
“One at a time, and without a clear plan, we built a team of 11 incredible people… Like me, our team didn’t come from traditional finance backgrounds. My first hire often describes himself as a former bartender. We all have a shared view of the world, a mostly calm exterior, and a similar burning underlying intensity.”
This quote brought to mind an excerpt from David Epstein’s book Range. There is one chapter of the book, “Thinking Outside Experience,” that emphasises the value of diverse experiences and interdisciplinary thinking in solving complex problems. Diversity in experience and perspectives can be a powerful driver of success and is often overlooked instead for specialisation. When individuals with unconventional or varied backgrounds come together, they bring unique ways of thinking and problem-solving that challenge traditional norms. This approach fosters innovation and adaptability, as it values broad, interdisciplinary skills over narrowly specialised expertise. It reinforces that success doesn’t depend solely on traditional qualifications but on assembling a team united by shared values, curiosity, and a relentless drive to tackle challenges creatively.
The Highs and Lows
Many of the highs of Hindenburg are publically known, from independently building a successful company to bringing down giants no one would have believed possible at the beginning. The lows of Hindenburg were the frivolous legal battles in pursuit of what he believed in and the behind-the-scenes challenges. “It has come at the cost of missing a lot of the rest of the world and the people I care about,” Anderson wrote.
The remarkable achievements of Hindenburg are widely recognised, ranging from his ability to establish a thriving company on his own to his audacious efforts in dismantling giants that many deemed untouchable at the outset. However, beneath this façade of success lie the significant challenges he encountered, including relentless legal battles that were fought passionately in defence of his principles. Hindenburg and Anderson faced numerous unseen struggles that tested their resilience. Reflecting on his journey, Anderson poignantly noted, “This pursuit has come at the steep price of missing much of the world and the cherished people in my life.”
An extract of the full letter can be found here:
A Personal Note From Our Founder
“I now view Hindenburg as a chapter in my life, not a central thing that defines me.” — Nathan Anderson.