James Chanos
James S. Chanos (born 1957) is an American hedge fund manager, and is 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 Jewish-Greek family living in Milwaukee.[1] He graduated from Wylie E. Groves High School, and then Yale in 1980.
Career
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 . 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 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.[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. 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.[5]
He is a long time skeptic of the Chinese economy. In a widely quoted January 2010 interview in the New York Times Chanos predicted the Chinese economy would crash, resembling “Dubai times 1,000 — or worse”.[6] He reasoned that historically analogous evidence points especially to a property bubble, particularly in commercial real estate.[7]
Previous jobs
- Analyst with Blyth Eastman Webber.[8]
- 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).[9]
References
- ↑ FT Interview
- ↑ 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.
- ↑ 3.0 3.1 3.2 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.
External links
- Chanos' statement to the SEC regarding hedge funds
- Remarks by Chanos to US House (2002)
- Chanos' Wall Street Journal article on the financial crisis and short selling
- James Chanos at the Internet Movie Database
- Charlie Rose Interview (flash video). April 12, 2010. About the China housing bubble