Jim Chanos is one of the best short sellers who manages billions of dollars in short portfolios. It’s not easy to make money by short selling over the long term. That’s why Chanos uses the indices as his benchmark when determining his performance fees. For example when S&P 500 gains 20% in a year, Chanos deems himself successful if he doesn’t lose more than 20%.
Most hedge fund managers make money on the long side because it is easier to make money on the long side. Corporate officers have usually more than necessary incentives to be successful. So it is really surprising to see Chanos managing only the short side of stock picking. Going long would allow him to leverage his short positions and he could also make money on the long side. Let’s assume Chanos has the skill to generate 5 percentage points of alpha on the short side and 2 percentage points of alpha on the long side. By being 100% short he can only generate 5 percent above his benchmark. By being 130 short and 30% long, he can generate 7.1 percentage points with the same 100% net short exposure. So it was really surprising to see that Chanos didn’t report any long positions in the past.
Last month he started filing 13F forms with the SEC. Now he has $83 Million of long positions in his portfolio. Here are the 16 stocks Jim Chanos is long at the end of December.
Stock | Ticker | Value (x1000) |
SPDR S&P 500 ETF TR | 14,964 | |
ISHARES TR | 12,910 | |
SPDR S&P MIDCAP 400 ETF TR | 9,881 | |
CITIGROUP INC | 6,219 | |
LIBERTY MEDIA CORP NEW | LSTZA | 5,066 |
FOCUS MEDIA HLDG LTD | 5,050 | |
KKR & CO L P DEL | 4,514 | |
BP PLC | 4,408 | |
VANGUARD INTL EQUITY INDEX | 3,611 | |
SPDR INDEX SHS FDS | 3,507 | |
RACKSPACE HOSTING INC | 3,204 | |
TERREMARK WORLDWIDE INC | 2,435 | |
POWERSHARES QQQ TRUST | 2,374 | |
NASDAQ OMX GROUP INC | 1,903 | |
NYSE EURONEXT | 1,685 | |
CHINA REAL ESTATE INFO | 1,530 |
His largest short positions are large, mid, and small stock ETFs. This tells us that Chanos isn’t very confident about picking long positions. Kynikos didn’t respond to our email inquiring about the reasons for Chanos’ recent long positions. In any case, Chanos seems to be relatively more bullish about these stocks.
His biggest long common stock position is Citigroup (C). Citigroup is hedge funds’ most favorite mega-cap bank. Hedge funds, 190 of them, own 8% of outstanding Citigroup shares. During the fourth quarter, they spent $2.8 Billion on Citigroup shares. Steven Mandel’s Lone Pine, Bruce Berkowitz’s Fairholme, Lee Ainslie’s Maverick Capital, George Soros, Bill Miller’s Legg Mason Capital Management, Bill Ackman’s Pershing Square, David Tepper’s Appaloosa, Daniel Loeb’s Third Point, Andreas Halvorsen’s Viking Global, Richard Perry’s Perry Capital, Joseph DiMenna’s Zweig-DiMenna, Leon Cooperman’s Omega Advisors, Brevan Howard, and John Paulson’s Paulson & Co are among the prominent investors who are bullish about Citigroup.
Chanos’ second biggest long common stock position is LSTZA. This stock is also very popular among hedge funds. Blue Ridge Capital, SAB Capital Management, Lone Pine, Ascend Capital, Eagle Capital Management, and Hound Partners have the largest positions in LSTZA.
Disclosure: I am long C, SPY.
