James Chanos

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James S. Chanos (born 1957) is an American hedge fund manager, and is president and founder of Kynikos Associates, a New York City investment company that is focused on short selling.

Life and career

James Chanos was born in 1957. He was born into a Greek family living in Milwaukee.[1] he graduated from Wylie E. Groves High School, and then Yale in 1980. He describes his investment strategy as being based on "intensive research into stocks"[2] 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 [citation needed]. 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.[3]

He rose to fame 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.[4]

In October 2000, Chanos started research into the valuation of Enron Corporation. 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. Enron stock declined from $90 in August 2000 to a low of $1 near the end of 2001.[5] Over this period, Chanos was a short seller of Enron during 2001, increasing his short position as more information surfaced. Kynikos profited greatly and Chanos himself became something of a celebrity as a consequence of his early awareness of Enron's problems.[6]

In 2010, James Chanos warned that China’s hyperstimulated economy was headed for a crash, not a sustained boom.[7] He questioned the stability of Chinese economy, stating that historically analogous evidence points especially to a property bubble, mentioning commercial real estate in particular.[8]

Resume

  • Analyst with Blyth Eastman Webber.[9]
  • Analyst with Gilford Securities - where he exposed Baldwin-United, which filed for bankruptcy thereafter.[3]
  • Analyst and Vice President at Deutsche Bank Capital Corp.[3]
  • Founder and President of Kynikos Associates Ltd (current).[10]

References

  1. ↑ FT Interview
  2. ↑ Leder, Michelle (2003). Financial fine print: uncovering a company's true value. John Wiley and Sons. p. 35. ISBN 0-471-43347-0, 9780471433477 Check |isbn= value (help). 
  3. ↑ 3.0 3.1 3.2 Sherman, Gabriel (December 15, 2008). "The Catastrophe Capitalist". New York Magazine. Retrieved September 24, 2011. 
  4. ↑ James Chanos (2002). Anyone could have seen Enron coming: Prepared witness testimony given Feb. 6, 2002 to the House Committee on Energy and Commerce. .
  5. ↑ "Encarta (2009). The Fall of Enron Stock". Archived from the original on 2009-10-31. 
  6. ↑ Enron: The Smartest Guys in the Room by Bethany McLean and Peter Elkind.
  7. ↑ Barboza, David (January 8, 2010). "Contrarian Investor Sees Economic Crash in China". The New York Times. Retrieved May 5, 2010. 
  8. ↑ "James Chanos interviewed by Charlie Rose". 
  9. ↑ Mahar, Maggie (2004). Bull!: A History of the Boom and Bust, 1982-2004. HarperCollins. p. 56. Retrieved September 24, 2011. 
  10. ↑ 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. 

External links

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