Jim Chanos: Short Construction, Long Power Grid Buildout ~ market folly

Thursday, March 5, 2009

Jim Chanos: Short Construction, Long Power Grid Buildout

Jim Chanos, noted short seller and manager of hedge fund Kynikos Associates recently appeared on CNBC and shared some of his views. His bearish stance on infrastructure in general is not necessarily new. He likes being short construction plays, but also likes being long infrastructure that plays the power grid buildout. Chanos says,

"We're short construction companies that are still doing physical build-out of buildings, say, for example, in Las Vegas."

In terms of the power grid, Chanos likes being long names such as Quanta Services (PWR). This name is intriguing because Jeffrey Gendell's Tontine Associates also once had a large stake in PWR. But, due to his funds troubles, he has since sold out of the name. CNBC suggests other ways to play the power grid are through McDermott (MDR), Jacobs Engineering (JEC), Shaw Group (SGR), and Foster Wheeler (FWLT). Keep in mind that these plays also have general infrastructure exposure and are not exclusively focused on the power grid. PWR certainly seems to have some of the most exposure in this area though, as Chanos has highlighted.

Additionally, Chanos is short numerous education plays such as DeVry (DV), Grand Canyon Education (LOPE), ITT Educational (ESI), Strayer Education (STRA), Universal Technical Institute (UTI). Being a shortseller, Chanos had a successful last year, but even he saw withdrawals as investors scrambled for cash.

Here's his video with CNBC:

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