The Golden Age of Corporate Fraud (w/ Jim Chanos & Mike Green)

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.1 • 1.1K Ratings

🗓️ 20 December 2020

⏱️ 87 minutes

🔗️ Recording | iTunes | RSS

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Summary

Jim Chanos, president of Kynikos Associates, is one of the most legendary investors of all-time, short seller or otherwise. Even after an incredible bull run that has taken many short sellers out back behind the woodshed to be put down, he's still generating incredible alpha for his investors. In this interview with Mike Green of Logica Capital Advisors, Chanos explains why we are in a golden age of fraud where the market fails to recognize frauds until the last minute. He also highlights the dynamic of growth-starved investors willing to throw money at any company that can demonstrate a large total addressable market (TAM) even if there is no demonstrable chance of profit. He cites business models like Uber and Grubhub as examples of the market's TAMSanity. He also touches on two of his highest conviction shorts, IBM and the commercial real estate sector, with IBM being described as the ultimate example of a COVID loser and commercial real estate being described as a "slow motion train wreck." Key Learnings: Investors wanting to get short must be cautious and manage risk as the market is not pricing in fraud until the last minute. As well, IBM should serve as an example of the types of companies who have failed to innovate and whose death has been accelerated by COVID. The writing is on the wall for commercial real estate and the debt and leverage in the industry can help investors determine the timing of its slow death as obligations will eventually have to be met. Recorded on November 11, 2020. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:28.2	today. The Mike Green, I'm here in Marin County. Really excited to continue my interview series. This time I get to sit now with my friend Jim Chainos.
0:51.0	Jim Chinos, Jim, it's wonderful to welcome you to Real Vision. I'm glad to be here, my friend Jim Chainos. Jim, it's wonderful to welcome you to Real Vision.
0:53.6	I'm glad to be here, my friend.
0:56.6	So you're in Miami right now.
0:58.2	You've been sheltering from the COVID storm.
1:00.3	And one of the reasons that you and I know each other is that you annually have hosted an event down in Miami called Bears in Hyber Nation.
1:09.0	That must have been a challenging experience for the past couple of years.
1:16.5	Certainly I know this year it was rescheduled and cancelled due to the coronavirus dynamics,
1:22.4	but you are extraordinarily well known for your
1:25.4	stewardship of a firm named Kinnicos and your ability to be short throughout the
1:31.4	longest bull market in history effectively.
1:34.0	Everybody wants to know the secret to how you've done that,
1:38.0	but from my experience, what you have done probably better
1:41.0	than anyone else in the Bear community has created a community of
1:44.8	individuals who value stock selection, value fundamental research and understanding of companies, and my experience is a in hibernation have always been extraordinary.
1:57.0	Just really, really bright people. I've attended, Josh Wolf has attended,
2:01.0	incredibly thoughtful people that really understand the individual companies.
	...

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