22 | Stephen Clapham, Behind the Balance Sheet

My guest today is Stephen Clapham (@steveclapham). Steve is a former partner of a Tiger Cub and former Head of Research at a second multi-billion hedge fund. Nowadays, he is the founder of Behind the Balance Sheet, where he produces investment research and offers training services. Steve is also the author of the book, The Smart Money Method: How to pick stocks like a hedge fund pro.  In this conversation, we cover red flags for fraud, accounting standards, and his new podcast. I hope you enjoy my conversation with Stephen Clapham.   For the full show notes, transcript, and links to mentioned content, check out the episode page on  https://compoundingpodcast.com/ep22    ------   Show Notes: [00:00:32] - [First question] - Where Stephen starts when analyzing financial statements [00:02:15] - Red flags to look out for?  [00:08:05] - Why don’t people care about financial statements? [00:19:10] - What changes would Stephen make to accounting standards? [00:25:17] - How to align incentives of auditors, companies and shareholders [00:27:30] - Worst accounting offenses he’s seen [00:28:31] - Why did Stephen start his podcast?   ------   Connect with Stephen: Follow Stephen on Twitter: https://twitter.com/steveclapham  The Smart Money Method: https://www.behindthebalancesheet.com/the-smart-money-method  Behind the Balance Sheet’s Website: https://www.behindthebalancesheet.com/  Behind the Balance Sheet Podcast: https://www.behindthebalancesheet.com/podcasts    ------   Mentioned/Recommended Content: The Smart Money Method: https://www.behindthebalancesheet.com/the-smart-money-method  FT Financial Literacy and Inclusion Campaign: https://www.ft.com/flic  The Analyst Academy: https://courses.behindthebalancesheet.com/p/analyst_academy    ------   Stay up to date with the podcast by signing up to the Compounding Curiosity Substack, where I’ll email you when the latest episode comes out along with my summary and takeaways, links to mentioned content, graphics and the transcript. Sign up at https://compoundingcuriosity.substack.com/    ------   Connect with Kalani: Visit the Compounding Curiosity PODCAST: https://CompoundingPodcast.com/  Visit the Compounding Curiosity SUBSTACK: https://compoundingcuriosity.substack.com/  Follow Kalani Scarrott on TWITTER: https://twitter.com/ScarrottKalani/  Sign up for Allocators Asia: https://KalaniS.substack.com/  Join the DISCORD: https://discord.gg/NPVNPVsCYb