Jim Chanos’ Full Presentation on Value Traps

Jim Chanos China's consumer data

We earlier wrote an aricle on Jim Chanos’  discussing five different value traps (link here.)

The five stocks Chanos mentioned were: CONSOL Energy Inc. (NYSE:CNX), Petroleo Brasileiro SA (NYSE:PBR), Hewlett-Packard Company (NYSE:HPQ),  Coinstar, Inc. (NASDAQ:CSTR), Banco Santander, S.A. (NYSE:SAN), and the Australian-based Fortescue Metals Group Limited (ASX:FMG). He also made reference to Best Buy Co., Inc. (NYSE:BBY)

Jim Chanos describes the following characteristics among value STOCKS:

Jim Chanos - Energy Investments After The Fall

Predictable, consistent cash flow

•Defensive and/or defensible business
•Not dependent on superior management
•Low/reasonable valuation
•Margin of safety using many metrics
•Reliable, transparent financial statements
Chanos lists these traits among VALUE TRAPS:
•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

Below is the full presentation on Scribd Courtesy of Vitaly Katsenelson :

98208144 VALUExVail 2012 James Chanos

Disclosure: No position in any companies mentioned

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