Jim Chanos at SALT Conference: Royal Dutch Shell, Chevron, Petrobras, NuSkin, Tesla

At the Skybridge Alternatives (SALT) Conference in Las Vegas, short seller Jim Chanos of Kynikos Associates sat down with Bloomberg's Stephanie Ruhle to talk about markets as well as some of his past and current short positions.  He mentioned NuSkin, Tesla, Petrobras and talked about other oil plays in general.

*Update: He's now delivering his presentation at SALT: short oil integrators.  One of his slides entitled "Brazil: risk masquerading as opportunity."  Sums up Petrobras as: "lying, cheating, and stealing."  He says he's short Royal Dutch Shell.  He's also short Chevron (CVX) due to LNG problems, among other things.

Embedded below is the video of Chanos' interview at SALT:

Jim Chanos: Short Vale & Petrobras (Sohn London Conference)

Continuing our series of notes from the Sohn London Investment Conference, next up is Jim Chanos of Kynikos Associates who gave a presentation entitled 'Brazil: Resource Rich, Not Riches."


Negative on Brazil

For those unaware, Chanos runs short-biased hedge fund Kynikos Associates.  As such, it should come as no surprise that at the event he presented 2 short ideas both with ties to Brazil: a metals and mining company, as well as an integrated oil and gas company.

The general theme of Chanos’s argument went beyond these two short ideas, though, as he suggested that Brazil was generally an unfriendly place for investors in a similar way to his recent portrayal of China as a roach motel.

He said that like China, Brazil has a system of state capitalism  which leads investors to subsidize state aims at the expense of investment returns. In Chanos’ view, both China and Brazil operate the wrong form of capitalism which leads capitalists to ‘get the bad end of the stick’.


Short Vale (VALE)

He said that the company appears cheap to value investors but in his view it is a value trap.  His main thesis on this name was that iron ore itself is over-valued.  Readers will recall that Greenlight Capital's David Einhorn said to short iron ore recently at the Great Investors' Best Ideas event.

Chanos argued that Vale is too dependent on China’s demand for iron ore.  Demand might be about to fall and besides China is building more of its own iron ore plants.  There are very few barriers to entry.


Short Petrobras (PBR)

This isn't the first time that Chanos has been negative on the Brazil state owned oil company as we've posted up his past negative commentary on PBR.

The Kynikos founder also feels Petrobras is a value trap and he also highlighted that:

- It looks like a value story trading on EV/EBITDA 2013 5.3x but it's not
- It has massive reserves of oil
- The government owns 64% of Petrobras so they cannot charge the full market price for oil and gas because of government interference
- They have a poor record of exploiting reserves

We've also posted up some of Kynikos' other short positions that have been revealed.


For the rest of the hedge fund presentations from this event, head to notes from Sohn London Investment Conference.

Jim Chanos' Presentation on Global Value Traps: CNX, PBR, HPQ, CSTR, SAN & FMG

Emailed in from a reader, today we're posting up Jim Chanos of Kynikos Associates' presentation entitled 'A Search For Global Value ... Traps!" 

He gave the presentation this past week at the VALUEx Vail conference, an event put on by Vitaliy Katsenelson, a CIO who made our list of top finance people to follow on Twitter.  You can follow Vitaliy on Twitter here.

In Chanos' presentation, the hedge fund manager outlines how investors can separate value stocks from value traps.  He specifies common characteristics of value traps as:

- Cyclical and/or overly dependent on one product

- Hindsight drives expectations

- Marquis management and/or famous investor(s)

- Appears cheap using management's metric

- Accounting issues

This is not the first time we've seen Chanos talk about his focus on value traps as we've posted up how he's been shorting Petrobras and Fortescue.  And in a separate interview he talked about his shorts of Coinstar and Dell.

In his latest presentation, Chanos outlines the bearish and "value trap" thesis associated with the following names:

U.S. shale explosion: Consol Energy (CNX), national oil company: Petrobras (PBR), computing revolution: Hewlett-Packard (HPQ), digital distribution: Coinstar (CSTR), troubled national balance sheet: Banco Santander (SAN SM), and  iron ore rush: Fortescue (ASX:FMG).


Embedded below is Chanos' entire presentation with his thesis on each name outlined:




For more on Chanos, yesterday we posted up his bearish China stance as well as an in-depth interview with Columbia Business School.

Jim Chanos Shorting Petrobras & Fortescue Metals, Bearish on Coal Industry

Jim Chanos appeared on Bloomberg yesterday from the Milken Institute Global Conference in Los Angeles.  The Kynikos hedge fund manager talked about his short selling strategy and his role as a "realtime financial detector."


Chanos on What He's Shorting Now

Chanos, of course, is famous for flagging Enron, among other notable frauds.  So what's he short now?  Petrobras (PBR).  He says that integrated oil companies are 'liquidating trusts.'

He also believes that natural gas is undergoing a revolution in the US and so he thinks this is bad news for the coal industry (particularly thermal coal).

He's also short Fortescue Metals in Australia.  This company essentially handles China's growth by supplying iron ore.  Chanos points out that iron ore prices have spiked up huge after being largely the same price for 100 years.  He doesn't think that's sustainable as it's not a rare earth.

You can also check out Chanos' bearish view on China.  He also thinks Chinese banks are "built on quicksand."


Chanos on Value Traps

The hedge fund manager says that a lot of his best short ideas have "looked cheap all the way down.  Just because a stock looks cheap does not mean it's good value."  He's short the personal computer space. 

We've highlighted how Chanos is short Dell and thinks it will continue to appear cheap as tablets continue to proliferate.  David Einhorn of Greenlight Capital (who is long DELL), would argue that the company is focused on the enterprise, not the personal computing market.  Chanos' secular shift in the personal computing world makes sense, but it seems like there might be better ways to express that bet.

He also mentions that while he's obviously a short biased fund, he's "long the market" as that's what he's benchmarked against.  His shorts have to inversely outperform the market for his hedge fund to earn its performance fee.

Embedded below is the video of Chanos' interview:



For more on Kynikos Associates, head to Chanos' presentation: beware the global value trap.

Soros Fund Management Bullish on Petrobras, Suncor & DirecTV: 13F Filing Q1 2010

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund filings.)

Next up is George Soros' hedge fund firm, Soros Fund Management. While he is still slightly involved, the bulk of the portfolio activity you see below comes from his son Robert Soros who runs the flagship Quantum Endowment. For 2009, Soros' Quantum Endowment Fund was up 28% as noted in our hedge fund performance numbers list. We follow Soros for sector leans due to their global macro tilt. Given that they dabble in pretty much any asset class they please, remember that the equity positions below are only a brief part of a cohesive whole.

George Soros has in the past voiced his concern over the deleveraging of the US consumer as he feels it could hurt consumer spending (and thus growth) in the future. Soros' thoughts from the markets are detailed in his most recent book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. And of course you can receive a primer on all things finance from the man himself in his first book The Alchemy of Finance.

The positions listed below were their long equity, note, and options holdings as of March 31st, 2010 as filed with the SEC. All holdings are common stock unless otherwise denoted:


Brand New Positions
Conexant Systems (CNXT) Notes
Cobalt International Energy (CIE)
iShares Emerging Markets Index (EEM) Puts
PNC Financial (PNC)
Telecom Argentina (TEO)
Covanta (CVA) Notes
Westport Innovations (WPRT) ~ we previously detailed Soros' new stake
Solar Capital (SLRC)
Petrohawk Energy (HK)
AMR (AMR)
JDS Uniphase (JDSU) Notes
RF Micro (RFMD)
Nokia (NOK)
ADC Telecomm (ADCT) Notes
Global Crossing (GLBC) Notes
Dow Chemical (DOW)
Staples (SPLS)
Exco Resources (XCO)
International Paper (IP)
Armstrong World (AWI)


Increased Positions
NovaGold Resources (NG): Increased position size by 435.8% ~ we previously detailed this
DirecTV (DTV): Increased by 27.3%
Suncor Energy (SU): Increased by 22.4%
Cadence Design System (CDNS) Notes: Increased by 20%
Lawson Software (LWSN) Notes: Increased by 19.6%
Petroleo Brasileiro (PBR): Increased by 17.7%
Verizon (VZ): Increased by 16.7%


Reduced Positions
Plains Exploration (PXP): Reduced position size by 24.7%
Monsanto (MON): Reduced by 17.4%
Hess (HES): Reduced by 16.1%
Emdeon (EM): Reduced by 12.2%
SPDR Gold Trust (GLD): Reduced by 9.6%


Positions They Sold Out of Completely
Mcdata (inactive) Notes
CSG Systems International (CSGS) Bonds
Terra Industries (TRA)
Select Sector Financials (XLF) Calls
Bunge (BG)
Coach (COH)
Heinz (HNZ)
Sandridge Energy (SD)
Energy XXI (EXXI)
iShares US Telecom Sector (IYZ)
CVR Energy (CVI)
James River Coal (JRCC)
Mechel (MTL)
Steel Dynamics (STLD)
Denbury Resources (DNR)
Windstream (WIN)
McMoran Exploration (MMR)
Patterson-UTI (PTEN)
Sterling Construction (STRL)
Century Aluminum (CENX)


Top 15 Holdings (by percentage of assets reported on 13F filing)

1. SPDR Gold Trust (GLD): 6.95%
2. Petroleo Brasileiro (PBR): 4.63%
3. Hess (HES): 3.46%
4. Suncor (SU): 3.26%
5. LSI Corp (LSI) Notes: 3.2%
6. Petroleo Brasileiro (PBR-A): 2.66%
7. Monsanto (MON): 2.62%
8. Linear Tech (LLTC) Notes: 2.49%
9. Lawson Software (LWSN) Notes: 2.22%
10. Interoil (IOC): 2.19%
11. RF Microdevices (RFMD) Notes: 2.11%
12. DirecTV (DTV): 2.03%
13. Verizon (VZ): 2.00%
14. Flextronics (FLEX) Notes: 1.98%
15. Plains Exploration (PXP): 1.80%

Firstly, please note that since Soros Fund Management is a global macro oriented firm, they undoubtedly have positions in other markets (debt, currencies, commodities) that are not required to be disclosed by the SEC. As such, the above is only partially representative of Soros' portfolio. That said, you can definitely see some themes via their equity exposure as they are long various oil and agriculture names.

Additionally, they seem to like the satellite play DirecTV (DTV). As we've detailed previously, Chase Coleman's hedge fund Tiger Global is bullish on DTV. It was also interesting to see Soros have a sizable long in Interoil (IOC) as many investment managers and pundits have labeled IOC as a potential fraud. Whitney Tilson's hedge fund T2 Partners has been short IOC under the notion that IOC has no real proven reserves and is essentially just a public relations hype machine. This dichotomy of opinion is what truly makes a market.

Overall, the natural resource and energy theme continues to garner a prominent position in Soros Fund Management's portfolio. Gold is their top holding, followed by large stakes in Petrobras, Hess, Suncor, Monsanto, Interoil, and Plains Exploration. They also show a large addition to NovaGold Resources, but we had already mentioned this position increase back when the transaction took place as both Soros and John Paulson bought shares.

Assets reported on Soros' 13F filing were $8.75 billion this quarter. Data from the SEC is aggregated and sorted automatically by Alphaclone, our source for hedge fund tracking, replicating, and performance backtesting (Market Folly readers can receive a special free 14 day trial). Remember that these filings are not representative of the hedge fund's entire base of AUM.

This post is part of our daily hedge fund portfolio tracking series. We've already detailed activity from numerous managers so click the links below to be taken to the respective portfolio updates: Seth Klarman's Baupost Group, Warren Buffett's Berkshire Hathaway, Stephen Mandel's Lone Pine Capital, and Bill Ackman's Pershing Square, David Einhorn's Greenlight Capital, Eddie Lampert's RBS Partners, David Tepper's Appaloosa Management, Mohnish Pabrai's Investment Fund, John Griffin's Blue Ridge Capital, Lee Ainslie's Maverick Capital, Bruce Berkowitz's Fairholme Capital Management, Andreas Halvorsen's Viking Global, Dan Loeb's Third Point, John Paulson's hedge fund Paulson & Co, Chase Coleman's Tiger Global, Roberto Mignone's Bridger Management, Phil Falcone's Harbinger Capital Partners, David Stemerman's Conatus Capital, and Shumway Capital Partners. Be sure to check back daily for new hedge fund updates.

Soros Fund Management's Portfolio: Adds Citigroup & Monsanto, Dumps Potash (13F Filing)

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is hedge fund Soros Fund Management. While many will automatically attribute this fund to George Soros, much of the credit also goes to his son Robert Soros who runs the flagship Quantum Endowment Fund. But for those of you wanting an inside look at George Soros' portfolio, look no further. We follow Soros' portfolio movements due to his macro sense and solid track record. We like to see what sectors he is flocking to and these filings are the perfect example of possible themes his firm might be seeing. Soros Fund Management is a true global macro player as they dabble in pretty much any asset class they desire, so just keep that in mind as the below only details their equity and options holdings.

In the past Soros has said one of his main concerns is the deleveraging of the US consumer over a longer period of time which will hurt consumer spending and thus growth going forward. More of Soros' thoughts on the financial markets are detailed in his latest book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means.

For 2009, Soros' Quantum Endowment Fund was up 28% as noted in our hedge fund performance numbers list. In the past we've also detailed some of their recent portfolio maneuvers. The positions listed below were their long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.


Brand New Positions
Citigroup (C)
DirecTV (DTV)
Select Sector Financials (XLF)
Calls Bunge (BG)
Kinross Gold (KGC)
Autonation (AN)
The rest of their new holdings were less than 0.5% of reported assets each:
Dollar General (DG), Heinz (HNZ), Orbital Sciences Bonds, Shanda Games (GAME), Hasbro (HAS), CTrip (CTRP), RailAmerica (RA), Sandridge Energy (SD), Energy XXI (EXXI), CVR Energy (CVI), Sina (SINA), Transatlantic (TAT), American Axle (AXL), & China Real Estate Information (CRIC)


Increased Positions
Select Sector Financials (XLF): Increased by 63,730% (no, not a typo)
Pfizer (PFE): Increased by 365%
Monsanto (MON): Increased by 244.4%
Suncor (SU): Increased by 171%
SPDR Gold Trust (GLD): Increased by 152%
Emdeon (EM): Increased by 54.6%
Plains Exploration (PXP): Increased by 14%
Hess (HES): Increased by 11.2%


Reduced Positions
Linear Technology Bonds: Reduced by 8%


Removed Positions (Sold out completely):
Potash (POT)
Goldman Sachs (GS) Puts
Audiocodes Notes
S&P 500 (SPY)
Wyeth (WYE) ~ merger transaction complete
iShares Emerging Markets (EEM) Puts
Applied Materials (AMAT)

The rest of the stakes they dumped were quite small, each less than 0.5% of the previously reported assets: Petrohawk (HK), Focus Media (FMCN), SPSS Bonds, RPM (RPM), Liberty Media (LMDIA), Conexant Systems Bonds, Renesola (SOL), MSC Software (MSCS), Navistar (NAV), Covanta (CVA) Calls, S&P 500 (SPY) Puts, & Anadarko Petroleum (APC) Calls


Top 15 Holdings by percentage of assets reported on 13F filing

1. SPDR Gold Trust (GLD): 7.5%
   
2. Petroleo Brasileiro (PBR): 4.2%
   
3. Hess (HES): 3.9%
   
4. Monsanto (MON): 3.6%
   
5. Citigroup (C): 3.5%
   
6. LSI Bonds: 2.88%
   
7. Suncor (SU): 2.86%
   
8. Petroleo Brasileiro (PBR-A): 2.82%
   
9. Interoil (IOC): 2.42%
   
10. Linear Technology Bonds: 2.4%
    
11. Pfizer (PFE): 2.4%
    
12. Plains Exploration (PXP): 2.18%
    
13. RF Micro Bonds: 2.1%
    
14. Select Sector Financials (XLF): 1.95%
    
15. Mcdata Notes: 1.94%
    

Much has been made in the media recently about the fact that George Soros has been out calling gold a bubble but has more than doubled his exposure to the gold exchange traded fund GLD. First, keep in mind that these portfolio disclosures were as of December 31st, 2009. So technically he could have sold completely out by now. It's also possible that they are merely using this position as a hedge of some sort. Also keep in mind that George is probably less involved with the day-to-day operations of the hedge fund these days as his son Robert is more responsible for running the show at Quantum. So, take that position with a grain of salt considering George Soros' recent comments. And for those of you tracking the precious metal's every move, check out this interesting technical analysis video on gold.

Of the positions they sold, the most notable is definitely Potash (POT). They completely exited their stake and it was previously one of their largest positions. They also exited LMDIA but keep in mind that they received new shares in DTV as a result of the merger transaction. Soros Fund Management continues to hold a large stake in Petroleo Brasileiro as they own both share classes. And while Soros sold off POT, they massively added to MON, another agricultural giant. Like many other hedge funds we've seen, Soros also added shares of Citigroup (C) in the fourth quarter. Soros also significantly boosted their stake in Pfizer, a stock we recently saw that was one of the top hedge fund holdings.

Overall though, some intriguing portfolio changes. To learn how to invest like George Soros, we recommend checking out his first book, The Alchemy of Finance. Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $8.8 billion this quarter compared to $6.2 billion last quarter, over a 40% increase in exposure. Remember that these filings are not representative of the hedge fund's entire base of AUM.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, Warren Buffett's portfolio, John Paulson's hedge fund Paulson & Co, Lee Ainslie's Maverick Capital, Dan Loeb's Third Point, Eddie Lampert's RBS Partners, David Ott's Viking Global, and Chris Shumway's hedge fund Shumway Capital Partners, Chase Coleman's Tiger Global, Philip Falcone's Harbinger Capital Partners, Roberto Mignone's Bridger Management, Thomas Steyer's Farallon Capital, John Burbank's Passport Capital, and Brett Barakett's Tremblant Capital. Check back daily for our new updates.