When Your Inner Voice Tells You It's Time for a Change

By Herb Greenberg

Thursday, October 7, 2021
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Editor's note: We're thrilled to announce that longtime journalist and CNBC contributor Herb Greenberg has joined the Empire Financial Research team.

Herb is one of the most accomplished journalists around, having appeared in Fortune, the Wall Street Journal, the San Francisco Chronicle, 60 Minutes, the New York Times, the Chicago Tribune, the Financial Times, Barron's, Forbes, Bloomberg, CNN, and more.

Going forward, Herb will regularly write essays in Empire Financial Daily, as well as contribute ideas to our flagship Empire Stock Investor advisory. Next year, we plan to launch his high-end newsletter. (Stay tuned for more details in the near future.)

In his inaugural piece, he explains how he ended up with us...


A funny thing happened on the way to starting a new venture in activist short selling...

Something else came along.

It was an out-of-the-blue e-mail from Enrique Abeyta, a source from my days as a journalist, that simply said, "Catch up?" This was about a month into my new gig, and since he's a former hedge fund guy with a short-selling bias, I thought maybe – just maybe – he wanted to share a stock idea we could chase. Not even close. Instead, Enrique wondered if I would consider joining him and a few of his ex-hedge fund friends at an investment newsletter company they had started... for individual investors. Long-biased, no less.

My first reaction was: You've got to be kidding.

Long-biased, after all, isn't exactly on-brand for me. Nor are these types of newsletters – especially with their often over-the-top marketing campaigns. And the timing – yikes! – with the market at all-time highs? The cynic in me knows what that means.

Still, that got me thinking...

Maybe it's time to do something different... very different. And maybe even (gasp!) a bit more upbeat.

For years, originally as a journalist, I carved out a niche of flying red flags over companies...

For a while, I was even CNBC 's in-house skeptic – going all the way back to a weekly segment playing the foil to the eternally optimistic Jim Cramer during the first year of Mad Money.

I later levered my skeptical side into a business, co-founding two institutionally oriented short-biased research firms.

It was a great run, but then...

In June, I walked away – handing the keys over to my business partner. I had simply stopped having fun and was bored to the point of practically sleepwalking through the days. After nearly seven years of pouring all my energy into our firm, working weekends and vacations – even publishing a report on an insanely rocky ship while crossing the notorious Drake Passage on my way to Antarctica – I was worn out.

Looking back, I barely stopped long enough in March 2020 to have heart surgery at the Cleveland Clinic. While my surgery and recovery thankfully went without a hitch, I never had a chance to reflect on what had just happened because I landed back home in San Diego into the chaos of the COVID-19 pandemic... and a lockdown.

And I was back at my desk the very next day – albeit at half-speed – throwing myself into the business.

Maybe it was the emotional upheaval of COVID, which seemed to break the momentum not just for me, but for everybody. Maybe it was the exhaustion of providing short research in a market that seemed to do nothing but go straight up. Maybe it was a delayed response to my heart surgery. Maybe it was a little bit of everything. What I knew was that I needed something new... anything to reinvigorate me as I headed into what I hoped would be the final stretch of my career.

Enter... activist short selling. Activist shorts seemed to me to be the only people still outing corporate frauds, and the diligence that goes into it is something I've done much of my career. It's the stock market equivalent of jumping out of a plane, with fingers crossed that the parachute will open. There is no salary. You 're paid on the back end. It's high-risk, high-reward. And if it works, high-adrenaline.

I've always been a risk-taker with my career... and this would be the ultimate risk. I figured the worst that could happen would be that I would fail.

Anybody who knows me knows that I'm wired to work...

I thrive on digging, collaborating, and publishing – and not waiting months to do it. It's what I do. If I'm having a good time, I stay awhile... when bored, as my resume shows, I cut my losses and move on.

So here I was...

Despite doing everything that goes into starting a new business – including all the legalities and even having a website built – it was like I had suddenly fallen off the grid. My phone stopped ringing. My e-mails dried up. No texts. I was working in dead silence – not just in terms of noise, but in terms of the intensity that drove me all those years.

Then it dawned on me... I had unintentionally throttled back, something I had never done in my 47-year career.

At the age of 69, the feeling was, well... weird. (Wait – I'm 69?)

This new, slower pace, it turns out, was both brutal (as in – not fun) and possibly a blessing... It was almost as if I was on a sabbatical. I became deeply introspective and, like so many people during the pandemic, began reflecting on my past – reassessing where I was in my life and seriously pondering what I really wanted to do going forward.

For the first time, I started thinking about the sheer significance of my heart surgery: How they had sliced a 9-inch incision into my chest, sawed open my ribs, spread them apart, and stopped my heart for an hour and 10 minutes while a heart/lung machine kept me alive – and while the surgeon replaced my aortic valve, aortic root, and part of my ascending aorta, with a single bypass of a minor artery tossed in as a bonus. The whole procedure lasted five hours. And here I was treating it almost like just another visit to the doctor.

I had just cheated death, and it took several months of working in silence – as well as this era of COVID and the wake-up call it has given all of us – to realize it.

With all of that rumbling around in my head, I asked myself: What do I really want to do for the rest of my professional life? Is this really how I want to spend my days? And if I do well, do I really want to live with the likelihood of litigation, harassment, and the overall stress that comes with activist shorting? An even bigger question: Do I really want to spend the end of my career almost exclusively in a "cocoon of negativity," which is where a CEO once claimed I lived? After all, according to the calendar... I'm supposed to be retired.

In cardiac rehab, the big takeaway is how to get rid of stress and how to keep your blood pressure low...

That's critical to the longevity of the kind of biologic valve I have. In the best of circumstances, it will last eight to 12 years before it needs to be replaced – 15 if I'm lucky. Yet here I was taking on more stress and watching my blood pressure rise.

My big surprise after heart surgery was that it didn't slow me down... If anything, I had more energy. But this summer, as I began this reflection and reassessment, I started thinking about how I had almost taken this life-saving surgery for granted.

And then I realized... I don't want to be known as the grumpiest guy in the graveyard.

And then... how much I love driving up to see my one-year-old grandson, who lives 500 miles away...

And how much my wife and I like to travel – and how I would love to take just one trip without having to think about publishing a report after a day of sightseeing.

All of that is juxtaposed against the backdrop of still wanting to work. (Crazy, right?) Even now, I never set an alarm, and my body clock geared to East Coast market hours still gets me up between 4 and 5 every morning, including weekends – just because I want to.

I had vowed never to retire if I still enjoyed and had the capacity for the mental gymnastics of researching and writing about companies. It's calisthenics for the brain – very much like putting together a puzzle. To this day, I still get a kick out of it.

That gets us back to that out-of-the-blue call from Enrique, who had become prolific with several newsletters at Empire Financial Research...

I've known Empire's founder, Whitney Tilson, for years.

Enrique's pitch to me was to ultimately launch a newsletter under the Empire umbrella. I would also be writing a few essays every week to anybody who subscribes – topics and tone of my choosing. But the real attraction is that it wouldn't be just me...

Idea generation and trading strategies would be in partnership with Enrique and another hedge fund veteran and all-around nice guy, Gabe Marshank – the calm, under-caffeinated counter to the intensely over-caffeinated Enrique.

Both of them have spent much of their professional lives shorting stocks, and like me, they're cursed with a skeptic's DNA. Ditto for the Empire team, including Whitney and Berna Barshay, another old friend.

Even better, the end market is not Wall Street. It's individuals looking for stock ideas – a throwback to my roots as a newspaper columnist. And while most of the ideas will be longs, the plan is for the team collectively to research and publish a few significant shorts a year.

If anything gave me pause, it was the marketing. But after thinking it through... the reality is, if the product is good, all the marketing in the world – over-hyped or otherwise ­– won't matter. As Enrique recently responded to a critic on Twitter (TWTR), "Don't let the wrapper define the product."

The best opportunities are often those you least expect... you know, the ones from out of the blue. For me, oddly enough, this one may be just what the doctor ordered.

As my longtime readers can count on me saying: Onward...

Herb Greenberg
October 7, 2021

Whitney Tilson

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About Berna

Berna Barshay is editor of Empire Financial Daily and a contributing editor to the Empire Stock Investor and Empire Investment Report newsletters.

She graduated cum laude from Princeton University and earned her MBA from Harvard Business School in 1997.

Following her graduation, Barshay spent 20 years on Wall Street. She began her career in equity derivatives at Goldman Sachs and later worked as a buy-side equity analyst at Sanford Bernstein, where she covered global consumer cyclicals and conglomerates.

Later, Barshay spent five years working as a portfolio manager of the Ingleside Select Fund, a long/short fund with a focus on value and event-driven stocks. She later was a portfolio manager at Swiss Re, where she managed the Consumer long/short book on the equity proprietary trading desk.

She has additional experience as a buy-side analyst at several long/short hedge funds – including Sky Zone Capital, Metropolitan Capital, Buckingham Capital, and LaGrange Capital – where she primarily covered consumer and technology, media, and Internet stocks in the U.S. and Europe, with some additional work in financials and energy.

Barshay is a fashion enthusiast, a pop culture addict, obsessive indoor cycler, and prolific social media user. She currently lives in New York with her husband, daughter, and three dogs.