In this episode we travel across the pond to chat with internationally renowned forensic accountant and author Steven Clapham. Steven talks to us about life as a sell-side analyst, his due diligence work when vetting a company, and his book “The Smart Money Method.”
When he’s not providing research for private clients, Stephen is educating the next generation of analysts with his online investment research and analysis training course - Behind the Balance Sheet.
Sit back, have a drink, and enjoy a conversation with Dan and The Pack as they swap stories with award-winning forensic accountant Stephen Clapham.
• 3:55 – Have you ever wondered what qualifications you need to be a sell-side analyst? According to Stephen – none. • 11:20 - The importance of knowing a company’s balance sheet and why Stephen thinks most investors pay little to no attention to it – at their own peril. • 12:46 - GAAP, Non-GAAP, and the real numbers in a company’s books. • 17:44 – Stephen’s independent view as a sell-side analyst doesn’t go over too well with one of the large banking firms. • 21:44 – Stephen moves to the buy-side and finds telling the whole truth much more rewarding. • 25:32 – The repercussions of not trusting a company’s CEO. • 33:55 – Why you “can’t prove” Alibaba is a fraud. • 42:58 – Auditors: do they matter, and if so, how much? • 47:12 – “It’s impossible for a company to commit fraud … people commit fraud.” Fraud – who’s committing it and who pays for it? • 49:10 – “Would we be better off without audits?” • 52:53 – Trained and Equipped: the importance of understanding the equities. • 56:34 – “The Old Boys Club,” Jamie Dimon, and the lack of true independent directors. • 101:11 – Stephen develops Behind the Balance Sheet, providing research and consultancy, and educating the next generation of analysts.