James S. Chanos (born December 24, 1957) is an American investment manager and currently serves as president and founder of Kynikos Associates, a New York City registered investment advisor that is focused on short selling.
Early life and education
Chanos was born in 1957 into a Greek immigrant family living in Milwaukee that operated a chain of dry-cleaning shops. He graduated from Wylie E. Groves High School, and then Yale University in 1980.
He describes his investment strategy as being based on "intensive research into stocks" looking for fundamental and large market failures in valuation, typically based on underestimated or previously unreported failings in the business or market of a stock. He follows this research by committing to a (usually large) short-position which he is willing to hold for long period of time—almost the mirror image of Warren Buffett's reputed "fundamentals+long stay" investment strategy. Because of this model, his investments function more like those of a whistle-blower than most typical investments. Examples of this include short-selling companies such as Baldwin-United, and more recently Enron Corporation.
He began his career in the 1980s as a short seller. After working as an analyst in several firms, he founded Kynikos (Greek for "cynic") in 1985 as a firm specializing in short selling. A critical position taken at Kynikos was his shorting of Enron.
In October 2000, Chanos started research into the valuation of Enron Corporation.[dubious ] He examined their use of mark-to-model (opposed to mark-to-market) accounting, which, in Chanos' view, results in management overstating earnings, as well as what appeared to be a worryingly low (6-7%) return on capital investment.[dubious ] Chanos was a short seller of Enron throughout 2001, increasing his short position as more information surfaced. Kynikos profited greatly, and Chanos became well known as a consequence of his early awareness of Enron's problems.[dubious ]
He is a long-time skeptic of the Chinese economy. In a January 2010 interview in the New York Times, Chanos predicted the Chinese economy would crash, resembling “Dubai times 1,000 — or worse”. He reasoned that historically analogous evidence points especially to a property bubble, particularly in commercial real estate.
- Analyst with Blyth Eastman Webber.
- Analyst with Gilford Securities - where he exposed Baldwin-United, which filed for bankruptcy thereafter.
- Analyst and Vice President at Deutsche Bank Capital Corp.
- Founder and President of Kynikos Associates Ltd (current).
- Leder, Michelle (2003). Financial fine print: uncovering a company's true value. John Wiley and Sons. p. 35. ISBN 0-471-43347-0. ISBN 9780471433477.
- "The man who got China right".
- Sherman, Gabriel (December 15, 2008). "The Catastrophe Capitalist". New York Magazine. Retrieved September 24, 2011.
- James Chanos (2002). Anyone could have seen Enron coming: Prepared witness testimony given Feb. 6, 2002 to the House Committee on Energy and Commerce. .
- Enron: The Smartest Guys in the Room by Bethany McLean and Peter Elkind.
- Barboza, David (January 8, 2010). "Contrarian Investor Sees Economic Crash in China". The New York Times. Retrieved May 5, 2010.
- "James Chanos interviewed by Charlie Rose".
- Mahar, Maggie (2004). Bull!: A History of the Boom and Bust, 1982-2004. HarperCollins. p. 56. Retrieved September 24, 2011.
- Gammeltoft, Nikolaj; Kisling, Whitney (May 24, 2011). "Chanos Misses Out as Chinese Stocks in U.S. Plunge on Accounting Concerns". Bloomberg. Retrieved September 24, 2011.