Short-seller Jim Chanos of Kynikos Associates, shares some of his favorite short-selling strategies, including his position on Hewlett-Packard and what he thinks of the Dell deal. The world’s largest short-sell, Jim Chanos of Kynikos Associates, weighs in on why he believes investors are “misled by Chinese GDP numbers,” and how he is making money there. And Chanos provides his perspective on the Fed’s asset-buying program.
Jim Chanos video and transcript below
he present. welcome bag. we’re here at the delivering alpha conference. our guest host today is jim chanos, and, jim, thanks so much for being here with us on a big day. my pleasure. last year your pick was hewlett-packard. why don’t we talk abouthewlett-packard now. what’s happened to the company and what you think about it. we’re still short. the stock has had a huge run. a lot of value stocks has had this year on the perception that it’s a turnaround. stock similar to best buy andothers. and we’re just not convinced that’s the case. no company goes straight down the line. on the other hand, they have some real issues. th revenues are declining at about 10% annually. and it’s across the board. it’s not just pcs and printers. it’s services, too, which everybody is sort of holdingthat out as their salvation. an argument can be made that one xt problems in technology is the services business. why? well, because more and more stuff is going to more efficientplatforms, the cloud and elsewhere. it’s changing the picture.and services, as well. a lot of value added stuff. a lot of fat the to cut there. so you doubled down on hp? we covered when it got down in the low double digits.he to cut there. so you doubled down on hp? we covered when it got down in the low double digits.e to cut there. so you doubled down on hp? we covered when it got down in the low double digits. to cut there. so you doubled down on hp? we covered when it got down in the low double digits.to cut there. so you doubled down on hp? we covered when it got down in the low double digits. one of our arguments was and still is accounting issues. and — where was it when you first put on the short? . it was in the high 20s and then last year i think it was about 19. got down as far as 11. and now it’s 26, i think. and then we covered our dell since the last time i was on squawk. and we’re watching this i thinkas much as you are. if you were an investor in dell right now still, would you vote for the transaction, at that time money and run at $13.65 or do you say shareholders are being ripped off and you take carl icahn’s deal and let him lever up thecompany? i don’t think shareholders are being ripped off. you can infer that from my views on the industry. on the other hand, i just hope this goes on and on and on. ts’s hysterical. he said/she said aspects are great. i don’t get it. i don’t care what the bankers are thinking about here. what are the shareholdersthinking? i think the shareholders at this point, i would notesoutheast asset, which had been with carl, has been selling alot of their stock. i think that i guess they see a hugh let pack lard before the turnaround, that the stock could the turnaround, that the stock could uble’ if the right stars align. the pc industry overall, you’ve laid out your arguments against that, the newspapers are pretty clear with what’s been happening. you think that’s it, game over? it’s a tough business becauseincreasingly brands mean nothing in that business. it used to be dell is better than xyz or abc. and that’s just not the caseanymore. companies that buy lots of servers are now building them themselves. and then you have the chinese for example.lenovo and acer are taking market share. it seems to be a horrible business and as more and more business goes mobile, i think it will be tough to justify that architecture at a premium. you point out a couple of big problems like we said for services. does that mean that you’ve also taken a look at ibm to short? we’ve looked at a lot of different services companies. i’ll leave it at that. i’m not disclosing anything about that today. we’ll have to jump from that. jim will be with us.