James Chanos

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James Chanos
Born (1957-12-24) December 24, 1957 (age 60)
Milwaukee
Nationality American
Occupation Investor
Known for Short selling
Notable work Founder of Kynikos Associates, LP

James S. "Jim" Chanos[1] (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 who is focused on short selling. He is a noted art collector , appearing on the BBC Four documentary The Banker's Guide to Art.

Early life and education[edit]

James Steven Chanos was born in 1957 into a Greek immigrant family living in Milwaukee that operated a chain of dry-cleaning shops.[2] He graduated from Wylie E. Groves High School, and received a B.A. in Economics and Political Science from Yale University in 1980.[3][4]

Career[edit]

He describes his investment strategy as being based on "intensive research into stocks"[5] 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.[6] 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.[7]

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 with $16 million,[8] as a firm specializing in short selling. A critical position taken at Kynikos was his shorting of Enron.[9]

Notable predictions[edit]

Correct bet on Enron collapse[edit]

Chanos was a short seller of Enron throughout 2001, increasing his short position as more information surfaced. Kynikos profited from the trade.[10] He gained notability as a short seller when he predicted the fall of Enron Corp. before it filed for bankruptcy in 2001.[8]

Incorrect prediction on Chinese real estate crash[edit]

Chanos is a long-time skeptic of the future of the Chinese economy. He became bearish after starting to study China in earnest in the summer of 2009.[11] In September 2009 he went public with his pessimistic outlook on China. On CNBC Chanos said the Chinese miracle economy was "getting harder and harder to believe", predicting the country would head the way of the "old Soviet Union".[12] In January 2010, the New York Times referenced Chanos making a prediction of an impending Chinese economic crash that would resemble "Dubai times 1,000 — or worse". Later on the Charlie Rose Show in April 2010 he maintained that China was on a "treadmill to hell" that would result in a crash caused by a "world class" property bubble.[13]

The Chinese real estate crash predicted in 2010 did not materialize and has caused financial media to question his investment wisdom. Bloomberg in a December 2017 article noted "Chanos has made wayward bets against U.S. stocks and China recently".[14] The Financial Times in an October 2017 article used his "Dubai times 1,000" quote an example of one of the "dire prophecies" about China’s real estate market that did not come true, demonstrating the subject was "tricky for foreign investors and experts to grasp".[15]

Chanos has pulled back on going short on China since his initial predictions. In an interview during a forum event hosted by Schechter Wealth in December 2017, he said "in the past few years we're actually now [have] reduced our China short and our global fund to the lowest it's been".[16]

Previous jobs[edit]

References[edit]

  1. ^ Porzecanski, Katia (13 October 2017). "Jim Chanos's Short Hedge Funds Have Fallen This Year". Bloomberg L.P. 
  2. ^ "Jim Chanos Resource Page". ValueWalk. Retrieved 10 November 2016. 
  3. ^ "James Chanos Lecturer in the Practice of Finance". Yale School of Management. Retrieved 10 November 2016. 
  4. ^ "James Steven Chanos: Executive Profile & Biography - Bloomberg". www.bloomberg.com. Retrieved 2017-07-17. 
  5. ^ 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. 
  6. ^ "The man who got China right". 
  7. ^ a b c Sherman, Gabriel (December 15, 2008). "The Catastrophe Capitalist". New York Magazine. Retrieved September 24, 2011. 
  8. ^ a b Chung, Juliet (16 September 2015). "China Bear James Chanos Roars After Years of Losses". Wall Street Journal. Retrieved 10 November 2016. 
  9. ^ James Chanos (2002). Anyone could have seen Enron coming: Prepared witness testimony given Feb. 6, 2002 to the House Committee on Energy and Commerce. [1].
  10. ^ Petruno, Tom (20 January 2002). "nts MARKET BEAT 'Short-Sellers' in Enron Finally Get Their Due". Los Angeles Times. Retrieved 17 July 2017. 
  11. ^ Barboza, David (January 8, 2010). "Contrarian Investor Sees Economic Crash in China". The New York Times. Retrieved May 5, 2010. 
  12. ^ Bacani, Cesar (November 16, 2009). "China's Economic Recovery: Miracle or Mirage?". Time. 
  13. ^ "James Chanos interviewed by Charlie Rose". Archived from the original on 2010-04-15. 
  14. ^ Welch, David (December 14, 2017). "Famed Short-Seller Jim Chanos Says Tesla Headed for 'Brick Wall'". Bloomberg L.P. 
  15. ^ Hancock, Tom; Wildau, Gabriel (October 19, 2017). "Chinese property boom props up Xi's hopes for the economy". Financial Times. 
  16. ^ "A Fireside Chat with Jim Chanos". ValueWalk. December 21, 2017. 
  17. ^ Mahar, Maggie (2004). Bull!: A History of the Boom and Bust, 1982-2004. HarperCollins. p. 56. Retrieved September 24, 2011. 
  18. ^ Gammeltoft, Nikolaj; Kisling, Whitney (May 24, 2011). "Chanos Misses Out as Chinese Stocks in U.S. Plunge on Accounting Concerns". Bloomberg L.P. Retrieved September 24, 2011. 

External links[edit]