market folly

Noted short seller and founder of hedge fund Kynikos Associates Jim Chanos was recently interviewed by Opalesque.  In it, Chanos talks about the psychology of short selling and his first great short idea in Baldwin United.

The hedgie also talked about the asymmetries between the long and short side of investing.  While both sides of the table require a similar skillset (ability to analyze companies), good short sellers have to be able to withstand the "giant positive reinforcement machine." 

Chanos says that this is where most managers fail on the short side as most cannot withstand all the positivity.  Along the same lines, we've in the past highlighted Chanos on the power of negative thinking.

Chanos has been very vocal about his stance on China and we've detailed his bearish view on China.  In the interview, he continued to voice caution as he thinks they're in trouble due to bad credit and credit extension.  And just recently we posted up a summary of hedge fund bearish China thesis.


Embedded below is Jim Chanos' video interview:



For more from this manager, we've detailed what stocks Chanos has been shorting recently.