Can Turtles Fly?

I ran across a very good interview with Jim Chanos by the Institute of New Economic Thinking  that I found interesting (h/t Naked Capitalism ). It is mostly about politics and very little to do with investing per se. I excerpted some of his points below but you should read the whole thing if you are interested in econopolitics. (As usual, bolds are by me.) source: "Chanos: Is a big change underway in global capitalism?" by Lynn Parramore for the Institute for New Economic Thinking, Dec 21 2016. Lynn Parramore: What about the rise in bank stocks since the election? Are banks anticipating deregulation? Jim Chanos: Almost all stocks are going up, mostly because of the belief of lower taxation. But after Obama’s election, most stocks went down and kept going down until the following March — and then they tripled! So I wouldn’t read a lot into the first month or two. It could be that banks are anticipating deregulation, but so what? Deregulated to what end? They’r...

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 compan...

Same old, same old so skip it if you are familiar with the China short thesis... but the following CNBC interview does provide some insight into what happened in China in the past. In particular, Jim Chanos talks about one of his short positions, Agriculture Bank of China, and how its balance sheet is not quite what it seems. Thanks to ValueWalk for bringing this video to my attention (there are an additional two on that site).

Twenty minute Bloomberg video of esteemed short-seller Jim Chanos' latest views on USA, China and the current state of affairs. This is sort of like beating a dead horse—at least on this blog—but I think China is an important story if you aren't bearish like me. NOTE: Bloomberg video has a flaw and the video starts playing automatically for some unexplainable reason.

Many of you probably already saw Jim Chanos' presentation from Value Investing Congress in October but I just got around to checking it out. Contrarians should definitely check out the presentation embedded below (Thanks to Jacob Wolinsky for bringing this to my attention .) James Chanos Presentation I thought I would pick off some key concepts put forth by Jim Chanos. The presentation isn't long but it contains some nuggets so read on if you are interested in my thoughts.

Happy Canada Day to fellow Canadians... and Happy Fourth of July to my neighbours down south. Here are some articles that have been on my list that I have read or plan to read. As usual, unlike other blogs, I don't necessarily link to recent articles so do keep the timeline in mind when reading my posts. (Recommended) Bitcoins - a novel, virtual, currency (Bloomberg Businessweek): Interesting story of a virtual online currency. I don't know if the US government, and others, will start cracking down on this—it's a threat to the existing currency scheme—but it remains to be seen. It's also interesting to see how the value of fiat currencies—bitcoin is purely virtual but limited by an algorithm—is set. Bitcoin's value appears to fluctuate wildly but that is likely due to the small number of users. "Reinsurance explained" (Liarspoker for Gurufocus): A basic introduction to reinsurance companies. (Recommended) Retained earnings for net-net stocks (Geo...

Jim Chanos, who is bearish on Chinese real estate, thinks that cracks are appearing in China. Chanos maintains his past views but says that his researchers who visited China are seeing bearish signs. Do keep in mind that Chanos has been bearish on China for over an year now and been wrong. Although, in the video he says his position is doing well since the Chinese market peaked out over 18 months ago. The following chart from stockcharts.com of the Shanghai Stock Exchange Composite shows how the stock market over there has been in a bearish trend since it peaked out in the middle of 2009 (do note that, unlikely the majority of investors out there, I view the Chinese markets more akin to a casino and don't draw many conclusions from them). Thanks to Credit Writedowns for the following CNBC video from last week:

Short-seller Jim Chanos is not always right but since I am a contrarian-wanna-be, I like listening to him. This segment covers a bunch of issues and involves a mini-debate between a China bear, Jim Chanos, and a China bull, Mohamed El-Erian of bond specialist, PIMCO. For what it's worth, Chanos has been bearish on China for years and been wrong. Chanos' bear thesis hasn't changed and you can brows through some of the my older posts to get his thoughts, including this post where he suggests some short possibilities . ( Direct link with transcript . h/t CanadianValue at GuruFocus )

The scene is a cocktail party high above the Shanghai skyline on a summer night a few months ago. Our host is a Master of the Hedge Fund Universe, one who doesn't want to be identified in the press. We'll call him Pete. Pete comes to China at least twice a year to stay abreast of what's happening in the world's most dynamic economy. He has said, in fact, that if he didn't have kids in school in the U.S., he would consider moving here, so bright is the future. In attendance are other hedge fund investors, venture capitalists, and fund managers, China bulls all. If there is one sure-fire way to ruin the atmosphere on such a pleasant evening, it is this: Ask the crowd what they think of the legendary short-seller James Chanos, CEO of Manhattan-based Kynikos Associates. So that's what I do. "Hey," I say to a cluster of people surrounding Pete. "Did you guys see what Jim Chanos said about China on Charlie Rose the other night?" "No,...

I think he is deserving of it—some won't agree—but it looks like Warren Buffett will receive the Presidential Medal of Freedom . Although awards of any sort are always controversial, given questionable recipients in the past, this is an important one. This is the highest civilian honour in the United States of America (the highest civilian award in Canada is the Order of Canada , although some seem to suggest it is the Order of Merit). You can't get anything higher unless you are in the military. Warren Buffett will be receiving the medal along with several other prominent individuals such as Yo-Yo Ma (artist), Bill Russell (basketball player), George H. W. Bush (former president), Angela Merkel (German chancellor), and a few others. Although some may disagree with awarding it to Warren Bufffett, I think it is an appropriate choice. If America represents capitalism, it is only fitting the greatest capitalist of modern times, Warren Buffett, receive the highest civilian hono...

Not sure how many others already saw this but I just ran across it recently. It's a debate (appears to be conducted on May 4th of 2010) between a China bull (Stephen Roach) and China bear (Jim Chanos.) Nothing earth-shattering for China-followers but it is still good to get the viewpoints of both sides. (BTW, does anyone know where I can find the full Jim Chanos interview with Bloomberg that I mentioned in a prior blog post . Apparently the video was supposed to come out on June 25th but I never saw it anywhere. Maybe only available to Bloomberg subscribers? If anyone knows where I can find it, please let me know.)

Thanks to The Big Picture, I ran across a very interesting Bloomberg interview excerpt with Jim Chanos. The interview is apparently set to be released on June 25th, and in the mean time, Bloomberg released a video excerpt. I'll reference the full video when it comes out but for now, check out the video referenced at The Big Picture blog or, for a shorter one on Ford (F), visit Bloomberg . Chanos suggests that it has been a tough sledding this year. He implies or says outright that he is short automakers (not clear if it's just Ford or others as well); stocks related to the China bust thesis; for-profit education companies; and most interestingly, oil & gas supermajors. His justification for shorting the oil & gas supermajors is very insightful to me (bolds by me): Chanos: "“[Decision to short oil majors] predates [the Horizon Deepwater rig], and it has to do with financing. If you look at some of the biggest oil companies in the world — and I’ll let you use yo...

The Charlie Rose interview with Jim Chanos, which was covered in the media and blogs last week, was finally released. I was really looking forward to this interview given my interest in this topic, and the master interviewer, Charlie Rose, doesn't dissapoint. Rose does an excellent job probing Chanos on most of the key issues. Even if you are not interested in China, I recommend this interview. Whether you like or hate Jim Chanos, or believe China is seeing a real estate bubble or not, I think it's worth checking out this 30 minute video (or at least read the transcript.) Chanos' insights on the nature of bubbles, especially from someone who makes a living trying to identify and profit from them, is interesting. Chanos is also a liberal so I'm in tune with his political thinking too; not sure about you ;) There are too many important points touched in the interview but the most interesting to me is Chanos' speculation on what would happen if China actually deval...

You may recall Jim Chanos, a short-selling specialist, making the news a few weeks ago when he was quoted in a New York Times article laying out the bear case for China. What's interesting about the China bear vs bull fight is how many of the tradtional bears and contrarians are actually bullish on China. Strategists such as Marc Faber and Jim Rogers, not to mention the countless perma-bears who seem bearish on everything, are actually bullish on China (usually through heavily leveraged bets on China-sensitive commodities.) So, even though the China bear case is quite signficant (we aren't talking about some minor asset class or security from the middle of nowhere), there are very few bears. Jim Chanos, as well as Hugh Hendry, appear to be the only prominent ones that are on the bear side. Jim Chanos gave a great presentation a few weeks ago, outlining his China bear thesis. Some of you may have already seen it but I just got around to watching it fully (it's almost an h...

hmm... the market is starting to sell off but not sure if it's anyting political (taxes on banking...also some suggest that Ben Bernanke won't be re-appointed but I don't think so; but if he does not get re-appointed, the next best canadidate appears to Lawrence Summers. Some of the "back-benchers" on the Fed also have a shot.) Last year's inflation vs deflation debate—which is not yet resolved—appears to have been sidelined, in favour of the China bubble debate. Here are some articles I found interesting:

UPDATE: The Dec 15 CNBC video doesn't show up properly for some reason :( Click here to go to the relevant CNBC page and check out the video on the left, in the article. I thought China was going to be a big issue in 2009. I was wrong. Nothing happened. But I am maintaing my stance. Is it still vulnerable to an implosion? Mike Shedlock links to two China bears , Doug Noland and Jim Chanos, who think China may be reaching dangerous territory. Mike Shedlock has also written in the past about his bearish views of China. I'm not a fan of Doug Noland (too perma-bearish for my likes) but I do pay attention to Jim Chanos. As you may know, Jim Chanos is perhaps the most successful short-seller in the last 30 years. There are others, like Jim Paulson, who profitted off short-selling mortgage bonds but they are not short-selling specialists; they go back to a long-only portfolio afterwards. Chanos, in contrast, is a specialist and very good at detective work. But his techniques ...

It's getting colder in the Northern Hemisphere... Here are some articles for a chilly day... Sorry about the lack of articles on specific investments. I haven't had much time to research them and I haven't found any potential long-term investments that I have liked. There have been quite a few mergers and takeovers announced but the spreads are likely small (no financial crisis or panic selling right now.) But if the market sells off, keep an eye on some of those announced deals to see if the spreads widen. British Columbia's real estate appears to be on the verge of a bust (The Globe & Mail): Difficult to tell from these stories but it looks like the real estate boom in BC might be on its last legs. I imagine it is still strong due to the Olympics build-out but we'll know how bad the situation is after the Olympics. Inside a day-trading software provider (The Globe & Mail): I am not actually sure that we are seeing a rise in day traders but I alway...

(source: Shirin Neshat for New York ) Chanos was excited that afternoon. He had just read a report that China’s electric consumption had dropped 4 percent, despite official government statistics that the Chinese economy was growing at 8 percent. He relished the implications. “I think they’re making up the numbers!” he said. As Wall Street picks up the pieces of the broken financial system, Chanos is already one step ahead. He sees China as the next domino to fall in the global meltdown. In recent months, Chanos has loaded up short positions on the infrastructure companies that have rushed to build China’s new highways, bridges, and tunnels. Now he is waiting for their share prices to tank. Watching Chanos’s trades over the last six months is like reliving the economic meltdown in slow motion. Since the summer, he has been cashing in his short positions in cratered banking and real-estate stocks, as the crisis has spread from the subprime-mortgage sector to become a full-scale economic ...