Short Selling – Jim Chanos

I mentioned short selling yesterday and to my great delight the first piece I stumbled across this morning are these excellent notes by Cameron Wright of Jim Chanos’ speech “The Power of Negative Thinking” at the CFA Institute’s Annual Conference. Cameron also posted these excellent notes of Seth Klarman Discussion with Jason Zweig at the CFA Institute Annual Conference.

Notes from Jim Chanos’ Presentation at the CFA Institute’s Annual Conference

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  • Hi Dean, Grantham said a bit at that conference as well. Good stuff. Out of curiosity, what’s your downside target on the allords and S&P500 for the next 12 months ?

    You asked before what is going to bounce the most last week. I suspect when the bottom is reached, resources but I suspect we haven’t got there yet, although RIO at 58 on friday was looking attractive.

    From fridays low:
    RIO: up 8%
    STW: up 2.5%
    NUF: up 5%

    I find RIO a fantastic trading stock, it really bounces up an down.

    Took a cold shower with my enthusiasm about NUF. I’ll sell tommorow and book the profit. Will be back to 95% cash in my discretionary trading account waiting…

  • Hi Sean
    Targets are a funny concept. I think the real value int hem is reminding us how deluded we are to think we can predict short term gyrations, which is what I classify 12 months as.
    Saying that I think the AUS market is currently around fair value, while the US market is overvalued and only supported by the always ambitious expectation of analysts. I expect further volatility, so your trading approach should work well for the coming year or three.
    I’ve considered buying more Biota and said on HC yesterday that despite it’s issues it looks attractive again.
    I’ve been looking at SBM as a hedge against the abyss.
    I started looking at TFC as a persistent guy keeps poking me with updates and it appears interesting and misunderstood.
    I looked at the upcoming Vocus IPO for a telecommunication lawyer friend. He was very positive on the company and the two main guys, but I couldn’t get comfortable with it.
    Mainly I’m studying as my first exams in 17 years are only a week away.

    As I keep saying, I think world wide markets will experience lower lows sometime this decade, but my patience does not stretch to sitting out of the market for what could happen in a few years time.

    All of the above is wild speculation and should not be used for anything beside amusement.

  • Yep, I could be waiting a while or a week. Who knows ? The market does look a bit range bound though. Like you, I have an idea of what fair value is but I guess one has to be guided as well by what happens. With BTA, I just remember the runup before they released Relenza and I’d rather wait until it’s 50c if it ever gets there. Interesting action on AAX which has fallen out of bed the wrong way. Good luck in your exam!

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