market folly

Noted short seller Jim Chanos recently appeared on numerous media outlets and we wanted to check in on the latest thoughts from the $6.7 billion Kynikos Associates hedge fund manager. If you're unfamiliar with him, then you can verify his short selling credibility with the fact that he called out Enron's shenanigans. For those of you perhaps less familiar with short selling, check out Kathryn Staley's book, The Art of Short Selling as well as Chanos' comments on the power of negative thinking.

In his conversation, Chanos touches on the auto bailouts and he takes issue with "rewarding failed business decisions repeatedly." While President Obama recently pointed out that a lot of people would be out of work if the automakers failed, the Kynikos manager thinks it would have been a lot cheaper to put a federal guarantee on warranties.

In the sector specifically, Chanos has been short Ford (F) for quite some time and he continues to be. He argues that there is too much capacity both domestically and globally. The industry, he opines, is similar to that of the airline industry and steel industry. Embedded below is Chanos' interview with CNBC. Here's the first part (email readers will need to come to the site to view it):



Additionally, Chanos has been short China via commercial property developers and basic commodity companies. We presented his in-depth investment thesis there in the past. And here's part two of his recent interview:



Chanos makes a very brief cameo in the new movie, Wall Street: Money Never Sleeps. He was also a consultant on the film and persuaded Oliver Stone to change the focus from hedge funds to Wall Street investment banks. Lastly, in a separate interview with Bloomberg, Chanos commented that he is still short for-profit education companies and he's been short them for a few years now. To learn more about shorting, head to Kathryn Staley's widely recommended book, The Art of Short Selling.