Jim Chanos runs Kynikos Associates, the lone short-selling hedge fund of any size — and the only one that that has been in business since 1985.
That’s no mean feat, as the stock market has risen almost 1,500 percent since Kynikos’s debut. Chanos has lived through at least three bear markets — the 1987 crash, the bursting of the dot-com bubble in 2000, and the global financial crisis of 2008 — and he’s waiting patiently for the next one.
“I’m not saying it’s the top of the market, but on the other hand, bear markets haven’t been outlawed,” he quips.
Chanos, of course, is already a legend. He will go down in Wall Street history for predicting the demise of Enron Corp., whose collapse resulted in a wave of prosecutions and the imprisonment of top executives — the kind of harsh penalties that have not been seen since.
But that was in 2001 — 17 years ago.
Since the financial crisis year of 2008, Kynikos’s shorts overall have been bleeding red ink, and investors have bailed. Kynikos has lost almost three quarters of its assets since the end of 2008. This year alone, its funds had fallen between 9 percent and 19 percent through July (net of fees), depending on the fund.
Read on for the rest of my profile in Institutional Investor. It’s the first profile of Chanos in a decade. He’s on CNBC and at conferences (not to mention Twitter), talking his short book, but no one has looked under the hood to see how he runs his business. This is a deep dive or “plonge” as one French reader said.