I used to think that good short-sellers could be trained like long-focused value investors because it should be the same skill set; you’re tearing into the numbers, you’re valuing the businesses, you’re assigning a consolidated value, and hopefully you’re seeing something the market doesn’t see.But now I’ve learned that there’s a big difference between a long-focused value investor and a good short-seller. That difference is psychological and I think it falls into the realm of behavioral finance.
James ChanosSo you know, everyone points out Greece's default record, but the history of a lot of sovereign nations is not a good one when it comes to lending them money.
James ChanosWhat people don't realize is that China papered over its last two credit bubbles, those in 1999 and 2004. The banks were never bailed out - they just exchanged their bad loans for questionable bonds from quasi-state organizations.
James ChanosThe Macau casinos have a wonderful business, it's taking in money from Chinese businessmen elsewhere who send it through junky companies to casinos to gamble. The growth continues and they have basically western managers and western accounting, so we trust the numbers a little bit more.
James ChanosHealthcare is growing now at about 10 per cent per annum in the U.S. top line, versus 3 per cent for the economy. As someone with a sharp pencil and an eye for this kind of thing, this can't last.
James Chanos