Taps Coogan – March 25th, 2022

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Legendary short seller and founder of Kynikos Associates, Jim Chanos – perhaps the last great short seller to have their reputation survive the Post-Global Financial Crisis world, recently spoke with Livewire Markets to talk about his outlook and warn that he still sees lots of over-valued companies despite the correction in markets since the start of the year.

 

Some excerpts on Jim Chanos:

“We did see, I think, record amounts of speculation in the US stock market last year and that may take some time to work off. Now, does that mean that the market is going down 30% from here? I have no idea. Does that mean we go flat for a while…? I really don’t know. What I do know is that a lot of equities are still priced for perfection and companies that might not be worth anything are trading at 10 to 15 times revenues, admittedly down from 20 times revenues, but are probably going to 1x revenues… So that part of the market is still very richly priced.”

“Any investor right now should really be scrutinizing the tech area where businesses are slowing down in terms of revenue growth and the businesses are still unprofitable and yet they’re using something like adjusted EBITA or adjusted EPS to tell you that somehow they are being profitable. Not only are they fooling you, they’re fooling themselves that they are allocating capital to unprofitable core businesses on the idea that you will value them based on some kind of metric that doesn’t reflect reality…”

There is more to the interview, so enjoy it above. 

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