Chanos speaks in length on his long career as a short-seller. [Warning: short-selling is very high risk, and not a recommended strategy for most people.] Here is a direct audio link to the Bloomberg business segment.
The interview offers interesting insights on the conviction needed to succeed with rules-based risk management and the courage to bet against the consensus view. He also talks about the reckless deployment of capital routinely exercised by Wall Street and corporate executives that buy shares at high market valuations and freeze in fear at market bottoms. The following chart shows the pattern of corporate buy-backs since the last market peak in 2008.
I am reminded that amid the crash of ’29, Herbert Hoover first sought an investigation of the ‘evil short-sellers’ rather than into the investment banks and the reckless sales forces that drove stock prices to nose-bleed levels that then collapsed on the masses. The more things stay the same…
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