Hedge Fund Manager Jim Chanos Shorting Automakers ~ market folly

Tuesday, December 15, 2009

Hedge Fund Manager Jim Chanos Shorting Automakers

Jim Chanos, the noted short-seller and manager of hedge fund Kynikos Associates was recently interviewed and provided some insight as to what he is shorting. And, we see that he has taken aim at automakers as he is short the manufacturers and said he would not want to be long Ford or Fiat. While it seems he is talking about the equity here, we found this interesting as many hedge funds have been long the debt side of the automotive industry as bonds in GMAC, Ford Motor Credit Corp, and Ford had previously been scooped up by prominent hedge funds.

Interestingly enough, Chanos is also betting against China and is doing so by betting against copper, iron ore, and various other commodities used in China's expansion. Take note though, that he does not include gold in this list of commodities to short since people typically don't create buildings out of gold. He says that he is just now putting on these shorts and he may be early but he sees many opportunities there.

This recent insight comes after we also covered an in-depth interview with Chanos. If you're unfamiliar with him, Chanos graduated from Yale and is well known for his short selling prowess where he puts a large focus on identifying fundamental flaws in valuation due to underestimated or unearthed problems within a given company. He founded Kynikos which is Greek for "cynic" and is most known for uncovering the issues at Enron.

Here is the full video interview from CNBC (Email readers will need to come to the site to watch it):

Make sure to also check out a recent in-depth interview with the Kynikos manager, as well as Chanos' presentation on ten lessons from the financial crisis.

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