Chanos: HP probably a secular short
James “Jim” Chanos, President, Kynikos Associates, says he’s hard-pressed to see how HP is going to grow their business, given most of their core businesses are declining right now. He feels differently about Apple, however.In 70645Out we’re short around 70910In All of wall st. 704Out look at that 70454
Welcome to our latest issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring Point72 Asset Management losing about 10% in January, Millennium Management on a hiring spree, and hedge fund industry's assets under management swell to nearly Read More
we had data out after the hp meeting yesterday indicating the decline is accelerating in pcs. meg whitman seems to be more optimistic than we are. but i will say that at the meeting yesterday, they’re now talking about revenue declines in 2014. that’s not what they were saying before. so in effect the guidance keeps coming down at that company. they’re talking about lots of restructuring, talking about margins improving and i’m hard pressed to see how margins will improve at any of their businesses given the secular head winds going on. would you write this down to almost zero? do you think there’s no future for a company like this? well, look, they have a lot of different businesses. all of these businesses are declining right now. so i think that’s the problem. that they’re all under assault. and the question is, can you turn around a tech company? ibm is a very difficult undertaking. we’ll see. i guess my point is, you are not somebody who jumps in and out of positions. i think i should sometimes maybe. but we stay with these things. if the company’s still getting worse. then we think it’s probably a secular short. mobility is king. it’s going to be distributed now so that, you know, the cloud is going to be — can’t they somehow — isn’t that going to be a big enough business for a lot of people to play in? it could be. hp is not going to be — typically these businesses, it’s almost winner take all. is it — one thing we always grapple with is whether as we go from analog to digital whether, is it a much smaller total number? i would think it’s we worry, will we get enough digital nickels to replace it. isn’t it going to be huge for everybody? well, you bring forth new businesses. the digitalization trend has brought forth great wealth and new businesses. it’s hurt the old business. it’s also been generally deflationary. less money then, it is less? yeah, i think so. where do you come out on apple, by the way? long apple. long apple? yeah, long apple and samsung. but, again, i caution people when they look at our sec filings understand that our longs are generally offset fundamentally against things
Chanos: Cloud long, coy on cloud short
James “Jim” Chanos, President, Kynikos Associates, discloses some of his company’s investments in the cloud space.
Meredith Whitney’s hedge fund adventure
Meredith Whitney has announced she is de-registering her brokerage business and is in the process of raising money for a new hedge fund. Does this mean if she can’t make it in the research business, no one can? Jim Chanos responds.
and we have a big news story on wall street this morning. meredith whitney launching a long/short equity hedge fund. no word on how much capital she’s raised so far. kenbell capital also showing that whitney requested to deregister her meredith whitney brokerage business and this is being positioned two ways. one is she’s going off to launch a hedge fund. one is she decided to get out of the business and move this way. what do you think of this? you know, i wish her luck. is the research business such a lousy business? does this determine — if she can’t make it work, does that mean nobody can? well, meredith is known, i think, for her skeptical views on things. and being a skeptic hasn’t been very profitable. i think — i’m not sure a long/short hedge fund is going to be profitable. maybe a long hedge fund. she could stick to things she knows, though. i remember when she started making market calls. she had a big city call and she was — making market calls for a while when she came on here. yeah, i think the market’s overvalued, the s&p, i know the consumer and i kind of kidded around with her about. she could do banks, right. i think she could do — she’s very smart. i spent time with her two weeks ago. i think her work is terrific. all right. okay. well, we wish her well. tough business, though.
James Chanos: Bad news for global coal
James Chanos, President, Kynikos Associates, says there is more bad news for global coal on the horizon as many countries switch to natural gas.