Jim Chanos: "The Biggest Short"

Great article by Steven Drobny about Jim Chanos, the well known short seller.

Chanos recommends his fund as an insurance, for all investors who have a sizeable "long" portfolio in shares. Chanos will do well when shares tank, and bad if shares rise. But from time to time there is an industry (for instance property developers) that is badly hit while the overall market rises, in those times both Chanos' fund (shorting that industry) and the overall index can rise.

I normally don't short particular shares (I do from time to time short an index, but only rarely), but even then Chanos' observations are interesting. The way to discover candidates to short is basically the same as the way to discover which shares to avoid like the plague.

Also, observations about China's economy and it's huge property bubble.

5 Great Presentations

Five presentations from the "Wine Country Conference":

• John Hussman: "An Unstable Equilibrium", QE (quantitive easing) simply doesn't work;

• John Mauldin: "2013, Unsustainability and Transition", avoid what is negatively affected by the Unsustainable and choose what is Sustainable;

• Chris Martenson: "A Grand Experiment" about exponential growth;

• James Chanos: "China, The Edifice Complex", many (well documented) warnings regarding China's growth from the famous short seller;

• Mike "Mish" Shedlock: "Brief lessons in History", "history suggests waiting for better opportunities is the prudent thing to do.