James Chanos ( a Greek-American born 1958 in Milwaukee and graduate of Wylie E. Groves High School) is the president and founder of Kynikos Associates, a New York City investment company that is focused on short selling. He graduated from Yale in 1980. Kynikos (Greek for "cynic") is one of the few firms specializing in short selling that survived the bull market of the 1990s.
He rose to fame in the 1980s as a "short" - a short seller who had a knack of spotting stocks that he thought to be overvalued. Chanos focussed on the fundamentals before betting if a stock would tumble in value. He had the ability and willingness to do the in-depth research needed to expose slippery accounting - research that most Wall Street analysts had neither the training nor the motivation to do at the time.[citation needed]
He spent months researching a stock, and then took a large position for a long period of time.[citation needed] His work turned out to function like a whistle-blower's, exposing companies like Baldwin-United, Drexel Burnham, and more recently, the much famed Enron Corporation.
In October 2000, Chanos started investigating Enron Corporation. He examined their use of mark to model (cousin to mark-to-market) accounting , which, in Chanos' experience, results in management overstating earnings, as well as their low 7% return on capital investment.
Chanos became an early short seller of Enron as 2001 progressed, increased his short position as more information surfaced. When the Enron scandal was out in the open, Kynikos profited greatly and Chanos himself became somewhat of a mini-celebrity as a consequence of his early probe into Enron's problems. Had the thousands of investors listened to his information on Enron, they could probably have saved the millions they lost after the collapse of Enron.

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By Richard Beales and Chrystia Freeland
Published: June 8 2007 03:00 | Last updated: June 8 2007 03:00
Jim Chanos is the founder and president of Kynikos Associates, the world's largest dedicated short-selling hedge fund. He formed Kynikos in 1985 and has bet against companies involved in a string of corporate meltdowns, such as Commodore International and Tyco International.

Perhaps most celebrated of all was his early bet against Enron after being puzzled by the company's accounting a year before its collapse in late 2001. But even he admits: "We didn't think it was a fraud until very much near the end of the saga."

His recent public short picks include Macquarie Bank and Moody's Investors Service. Mr Chanos is also chairman of the Coalition of Private Investment Companies, a hedge fund lobby group.

Below are highlights from his video interview with FT.com.

There are few pure short sellers working right now. Is it a hard area to specialise in given the long-running bull market?

We like to say we're the embodiment of survivorship bias but I think it's a very difficult way to make a living on Wall Street, which is why a lot of people don't do it. I hope it remains a difficult way to make a living, because hopefully more people won't do it.

Having said that, I think that there has been winnowing out of the herd, if you will. It probably peaked out, in terms of dedicated short selling funds on Wall Street, in 1990. And then there was another culling of the herd in 2000.

What's your [short selling] case against Moody's?

Moody's is a simple story. It's structured finance. My argument against Moody's is that they are no longer a referee on the playing field, they are actually playing at this point. So although they are wearing an umpire's outfit, they have a Yankees hat on and I think that's the real problem, in that they are so entwined in the structured finance business.

JUNE 08, 2007

Why is Jim Chanos short of Moody's?

According to today's FT (8th June 2007),the world's most famous short-seller, Jim Chanos, holds a substantial short position in Moody's shares. As Chanos says, 'although Moody's are wearing an umpire's outfit, they have a Yankees hat on and I think that's the real problem, in that they are so entwined in the structured finance business.' Chanos sold Tyco, Enron and the online gaming sector short - would you bet against him again? Utilisation™ has risen from 6.5% to 24% over the last

Paulson received his BS in finance from New York University’s College of Business and Public Administration, where he graduated first in his class, and an MBA from Harvard Business School, where he was designated a Baker Scholar, the school's top academic honor, for graduating in the top 5 percent.[1] Paulson began his career at Boston Consulting Group before leaving to join Odyssey Partners. He later worked in the mergers and acquisitions group at Bear Stearns.

Prior to founding his own firm, he was a partner at mergers and acquisitions firm Gruss Partners LP. In 1994, he founded his own hedge fund with $2 million and two employees (himself and an assistant).

12 de marzo de 2009

A lo visto en Finanzas publicas, respondo brevemente: La guerra no fue, pero el gasto de FDR... Tampoco

el presidente del comité de Servicios Financieros del Congreso, Barney Frank, anunció ayer que la SEC reintroducirá una polémica norma que limita las posiciones bajistas el próximo mes. Y Wall Street aceleró su subida con la noticia.

Se trata de la llamada uptick rule, que era una norma que estuvo vigente mucho tiempo hasta que fue derogada hace año y medio. Esta norma sólo permite tomar posiciones bajistas si el último precio de una acción (el último tick) es superior al anterior; es decir, sólo se puede poner uno corto si el movimiento anterior ha sido alcista. Esto pretende evitar que las posiciones bajistas alimenten el desplome de los valores. Los short sellers deben esperan un rebote antes de tomar posiciones.

"Cambiaría el más bello atardecer del mundo por una sola visión de la silueta de Nueva York. Particularmente cuando no se pueden ver los detalles. Sólo las formas. Las formas y el pensamiento que las hizo. El cielo de Nueva York y la voluntad del hombre hecha visible. ¿Qué otra religión necesitamos?. Y entonces la gente me habla de peregrinaciones a algún agujero infecto en una jungla, a donde van a homenajear a un templo en ruinas, a un monstruo de piedra con barriga, creado por algún salvaje leproso. ¿Es genio y belleza lo que quieren ver?. ¿Buscan un sentido de lo sublime?. Dejadles que vengan a Nueva York, que vengan a la orilla del Hudson, miren y se pongan de rodillas. Cuando veo la ciudad desde mi ventana -no, no siento lo pequeña que soy- sino que siento que si una guerra viniese amenazar esto, me arrojaría a mí misma al espacio, sobre la ciudad, y protegería estos edificios con mi cuerpo".
Aynd Rand

la ficha tecnica:

There is a historical relationship where at certain points in time the gold and the Dow trade at a 1:1 or a 2:1 ratio, where one or two ounces of gold can purchase the Dow. When this happens gold has reached its peak in terms of purchasing power relative to other financial assets. These are periods where investors have lost confidence in paper assets. It occurred in 1896, 1929 and 1980 and we believe we are approaching this ratio again.

Yesterday 7.4 ounces of gold purchases the Dow. Yet during the height of the technology market in 1999 it took 44 ounces. The number of ounces it takes to buy the Dow is now less than half. We believe this ratio will once again be 2:1