I ran across the following presentation by Jim Chanos and thought you will find it insightful. Even if you aren't into short-selling—I am not—it is useful to see what sort of investments you may want to avoid. Value investors tend to ignore macro views but those who are more influenced by macro may want to pay attention to bearish views of any investments they are considering.
Back in May, Chanos gave this brief interview to Bloomberg briefly mentioning the topics covered in the presentation.
The presentation covers Chanos' bearish thoughts on what he feels are some characteristics of value traps. He goes on to list several investments that he views as value traps. Here are two summary slides from the presentation.
I share most of Jim Chanos' views and think investors should be careful with the areas he identified. For instance, I do think traditional PC manufacturers could lose big—he is bearish on HP—as tablets and mobile computing replaces PCs. Even companies like Microsoft could come under threat (he doesn't identify this).
He maintains his longer-term bearish view of some segments in the commodity complex, such as coal and iron ore miners. He is bearish on coal because natural gas, particularly from cheap shale gas, is replacing thermal coal in electricity-generating power plants. As for iron ore, it's a bearish bet stemming from a potential Chinese slowdown.
However, I'm not too sure about his short thesis for digital distribution. It could take a long time for companies like Coinstar, which owns Redbox, to materially suffer. For instance, even with digital e-books taking off, physical books are still selling reasonably well. Anyone betting on a collapse of the physical book market has been wrong so far (even though book sellers like Barnes & Noble and Borders have suffered).
The following presentation details his views:
Thanks to GuruFocus for bringing the presentation to my attention. Tags: China, commodities, Jim Chanos, tech cyclicals, technology