Enron’s Short Seller Jim Chanos: Stay Away From U.S. PC Tech Firms

Jim Chanos on Daily Ticker: Stay Away From U.S. Tech Firms

Posted: 08 Apr 2013 01:13 PM PDT

Mike “Mish” Shedlock

Here is an interview of Jim Chanos by Lauren Lyster from the Wine Country Conference. Chanos says Stay Away From U.S. Tech Firms

The Daily Ticker’s Lauren Lyster sat down with Chanos, also president and managing partner of Kynikos Associates, at the 2013 Wine Country Conference in support of Les Turner ALS Foundation last week. Of course we asked him: “What are your biggest shorts?” His response? U.S. technology. “I’ve been a big bear for the last year and a half, two years, in the P.C. space,” Chanos says. “I think that we are seeing a secular headwind in that business as more and more people go to mobility and tablets and the cloud. The P.C.-centric space is going to increasingly see negative surprises.” Chanos cites Hewlett-Packard (HPQ) and Dell (DELL) for problems with their accounting practices. “They spend very little on R&D and yet the companies that everyone wants to compare them to spend dramatically more on R&D thus, hurting their profitability,” he notes. Even though Dell and HP have been starting to make huge acquisitions to gain a competitive advantage, they’re doing a “very bad job” at it, Chanos argues. “I am completely mystified as to what the buyout groups at Dell are seeing here because the business from a cash flow point of view, from an accounting point of view, is deteriorating right before your eyes and yet there seems to be a number of players who think this is the greatest thing since sliced bread,” Chanos says. Chanos offers a few pointers for the average retail investor including: don’t try to trade like a hedge fund. “The deck is stacked against retail investors selling short on their own. I don’t think it is generally a good policy,” he says. “Just sell down your stocks to sleep at night.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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