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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

SPY

14,964

ISHARES TR

IWM

12,910

SPDR S&P MIDCAP 400 ETF TR

MDY

9,881

CITIGROUP INC

C

6,219

LIBERTY MEDIA CORP NEW

LSTZA

5,066

FOCUS MEDIA HLDG LTD

FMCN

5,050

KKR & CO L P DEL

KKR

4,514

BP PLC

BP

4,408

VANGUARD INTL EQUITY INDEX

VWO

3,611

SPDR INDEX SHS FDS

GXC

3,507

RACKSPACE HOSTING INC

RAX

3,204

TERREMARK WORLDWIDE INC

TMRK

2,435

POWERSHARES QQQ TRUST

QQQ

2,374

NASDAQ OMX GROUP INC

NDAQ

1,903

NYSE EURONEXT

NYX

1,685

CHINA REAL ESTATE INFO

CRIC

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 (NYSE: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.

Source: Jim Chanos' 16 Favorite Long Stock Picks