Jim Chanos Quotes
105 Jim Chanos Quotes
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[In April 2010 on China’s oversupply of housing.] Supply will equal demand at some point – it always does! And then there is this precarious tipping point where suddenly you can’t sell a project and then it’s just as if everyone goes from the port side of the cruise ship to the starboard side of the cruise ship all at once. You get this tipping point – you get this sort of light bulb moment - I’ve got to get out while I can, and the buyers dry up. It’s as old as the market itself.
Jim Chanos
[In April 2010] The history of western investors making money in China is not a great one.
Jim Chanos
[In April 2010] We’re wrong on things all the time… No one position is more than 5% of our capital.
Jim Chanos
[In April 2010 on the reputation of short-sellers.] After Enron I thought it was getting better. But with the financial crisis of ’08 and thanks to some of my friends in the banking industry, we started sprouting two horns and a tail again.
Jim Chanos
[In April 2010 on Lehman Brothers.] You can be off by a billion here and a billion there maybe, but when you’re off by a one hundred and fifty billion dollars on a six-hundred billion balance sheet – there’s fraud involved. There’s fraud. Someone knowingly signed those financial statements…
Jim Chanos
[In April 2010 on how he got into short-selling.] It was completely an accident.
Jim Chanos
[In April 2010 on looking at an early company on looking at Baldwin United] It was completely all smoke and mirrors… They were selling annuities through wall street firms and booking all the profits – ala Enron - upfront.
Jim Chanos
[In April 2010 on his beginnings] I put out a few sell short reports on Baldwin and the stock promptly doubled – which was my first real introduction to the short side. We were ridiculed… And then the company and a lot of insurance companies were seized on Christmas eve of 1982 and the company was rendered insolvent almost overnight.
Jim Chanos
[In April 2013] In virtually all cases of major financial market fraud over the past 20 years, the only people who really brought forth the fraud into the light were either internal whistleblowers, the press, and/or short-sellers. It was not the normal guardians of the marketplace - regulators, law enforcement, external auditors or people like that - that did it.
Jim Chanos
[In April 2013] Short-sellers played an important role in the marketplace not only in terms of capping, sometimes, irrational exuberance in terms of prices, but also in ferreting out wrongdoing.
Jim Chanos
[In April 2013 on catching financial fraudsters.] There’s no single tool that works all the time…
Jim Chanos
[In April 2013] One of the more interesting observations in the world of fraud is that some of the most egregious frauds were some of the most philanthropic companies in their communities.
Jim Chanos
[In April 2013 on investment banks and Enron doing secret agreements about offshore vehicles and new stock issuance.] When you see just how much in fees a lot of the banks and brokers made in these things, there’s an awfully strong incentive to look the other way and not ask the tough questions.
Jim Chanos
[In April 2013] The greatest clustering of fraud in the financial markets occurs, as you might imagine, during and immediately after the biggest bull markets. As I like to tell my students, it’s basically a period in which people suspend their disbelief. Everybody’s getting rich and it becomes increasingly easy to sell more questionable schemes and investments to investors.
Jim Chanos
[In April 2013] We do see that the fraud cycle generally does track the broader financial market cycles we see with a little bit of a lag…
Jim Chanos
[In April 2013] It appears that incidents of fraud in publicly traded corporations (globally) is somewhere in the order of 10-15 percent of the companies.
Jim Chanos
[In April 2013] An awful lot of fraud is, well, I didn’t reserve for bad debts and my earnings were overstated for a few quarters but then we reversed it later, and it’s probably not go-to-jail-type fraud. But it is misrepresenting numbers to the marketplace and to investors. And I think that you can still lose money if it gets revealed when you own the securities.
Jim Chanos
[In April 2013] Stupidity is not a crime, and making bad decisions is not a crime. It may certainly lead to grievous losses, but that’s the marketplace. And I agree with that 100 percent.
Jim Chanos
[In April 2013] Financial crimes, unlike crimes of passion and crimes of opportunity, come with their alibis already built in. You build a veneer of legitimacy about what you’re doing. You get accountants to sign off on what you’ve done. You don’t look at any emails or get sent any emails…
Jim Chanos
[In April 2013] If people think that the game is rigged and they’re not in on it, they’re going to put their money somewhere else…. That’s almost impossible to quantify. But you know there’s an effect.
Jim Chanos
[In April 2013] We should not put taxpayers at risk for trading activities…
Jim Chanos
[In April 2013] If I’m a hedge fund manager or investor, or if I’m a day trader, I understand the risks I’m taking. I’m a big boy, ok? And if I don’t do my work and someone pulls the wool over my eyes, well, shame on me. But if my aunt in Okauchee Lake ends up having to foot the bill for Countrywide or Lehman Brothers or AIG, that’s not fair…
Jim Chanos
[In April 2013 on how ‘too big to fail’ can create fraud.] If truly people believe that because of their size, they can’t be prosecuted, it actually brings forth a new issue of moral hazard extreme: illegal behavior.
Jim Chanos
[In October 2013] Pressure is rising and things are getting more speculative. It’s time to be a little more careful than people were four years ago.
Jim Chanos
Accounting matters… A lot!
Jim Chanos
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