market folly

Kynikos Associates founder Jim Chanos was on CNBC today talking his short positions, China, and even some of his longs.  Here's the key takeaways from his talk:


Chanos' Technology Longs & Shorts

One of the main takeaways here is that he's long leading players in the mobile smartphone/tablet arena: Apple (AAPL) and Samsung (KRX:005930).  At the same time, he's short the slowly dying PC makers like Dell (DELL) and Hewlett Packard (HPQ).  While the trade hasn't been working well as of late, he still thinks the fundamentals will win out over time.  He thinks printers, ink and PCS all face secular declines.


On China

A few days ago, we posted up Jim Chanos' presentation on China from the Wine Country Conference.  On CNBC today, he talked about why he feels China's economic situation has actually gotten worse.  He points to the rapid credit expansion over there and sees a potential bubble. He likes to be short companies related to real estate and construction in China and also pointed out steelmakers and iron ore players.  Greenlight Capital's David Einhorn has also said to short iron ore.


On What He Looks For in Shorts

The Kynikos manager says that "timing is not my forte" and the ever-rising markets of today can be difficult for a short-seller.  He says, "It's problematic because it's more frustrating, but on the other hand you're given more opportunities."  He feels that ultimately, the fundamentals will win out because these rallies have also propped up the 'leaky boats'.  He also somewhat joked that they like to look at companies that put their names on sports team arenas.

Chanos looks for an edge in something that everyone's not focused on.  Two simple indicators he likes: wholesale executive departures and large amounts of insider selling from multiple individuals.  He says, "Those two indicators together are about as big of red flag as you can get."


Embedded below are the videos of Chanos' interview on CNBC:

Video 1 on China

Video 2 on tech stocks

Video 3 on natural gas and coal

Video 4 on what he looks for in short selling


For more from this hedge fund manager, head to Chanos' recent China presentation.