Short-seller Jim Chanos warned of a US debt default black swan, slammed Tesla's rally and said bulls have dreamed up a 'nirvana' outlook in a recent interview. Here are his 11 best quotes.
Famed short-seller Jim Chanos is still betting against Tesla, he said in a recent interview.
He also warned about an "apocalyptic" war between the US and China and praised Hindenburg's recent report on Adani Group.
Here are his 11 best quotes.
Jim Chanos warned the US defaulting on its debt could represent an economic "black swan" event and slammed Tesla's recent share price turnaround, in an interview with CNBC's "Fast Money" Monday.
The legendary short-seller also shared his thoughts on meme stocks' resurgence, bulls' faith that the Federal Reserve will start cutting interest rates soon, and Hindenburg Research's report alleging market manipulation and accounting fraud by Gautam Adani's business empire.
Here are the 11 best quotes from Chanos' interview from Miami, which have been lightly edited for clarity.
On a potential war between China and the US:
"A war in the Pacific is serious stuff. Let's not forget we have a war in Europe going on right now… tanks, artillery, things we haven't really seen in our lifetimes. So a war in the pacific – all bets are off. It upsets everything because of supply chains, whatever – having China go to war with the west would be apocalyptic."
"I've been watching the China reopening trade like everyone else has for the last six or nine months and marveling at it but I don't think there's any way to handicap [a war between China and the west] as a hedge fund manager. Again, if it happens, the unintended consequences would be severe."
"We're far more intertwined into the Asian economies, in particular China. Anything that would end that and bring us into a Cold War, much less a shooting war, has to be a major, major event for not only markets but geopolitics. It's scary stuff."
On stocks rallying in January despite fears of a looming recession:
4. "We don't try to time the market but like anybody else I have opinions and things are not cheap."
5. "Corporate profits are going to be up 12% this year, inflation's coming down to 2%, the Fed may be easing at the end of the year. That's pretty much nirvana if you're a bull. People are pricing in a pretty nice Goldilocks scenario."
On the a potential US debt default:
6. "That would be kind of another black swan that nobody thinks will happen, including me. When push comes to shove, I think we're going to the interest on our debt, but who knows – I could be wrong."
On Tesla's recent rally:
7. "Now that earnings estimates have come in hard for 2023, the narrative seems to be that there's a price war going on but the legacy auto guys are going to be hurt a lot more than Tesla is. OK, but that just shows you that the auto business is a tough business. If you've got to cut prices or raise prices for ebbing supply in demand, you're in a cyclical business."
8. "It's been an insane three or four weeks. You've had stocks like Carvana triple, you've had Beyond Meat, which we think runs out of money this year, up 40% or 50%. Tesla's not alone."
On meme stocks' apparent resurgence:
9. "Since the first quarter of 2021, which I keep saying was the most speculative market I've seen in my lifetime – the meme stocks, the SPACs, NFTs, crypto – every time the meme stocks have taken off, it's been the end of the rally not the beginning… every time retail comes back into these names to squeeze the shorts, it's a pretty good sign people have lost their fear."
On fellow short-seller Hindenburg's recent report about the Adani Group:
10. "Hindenburg is a very unique example. They do phenomenal work. The Adani report was amazing – I read it over the weekend. When they put something out, we rush to read it."
11. "Short-sellers continue to be vilified – just get on social media. So many stocks have a rationale for ownership because of the short position. I just keep warning people, please don't buy worthless pieces of paper because someone has a different opinion than you. Do the work and understand what these stocks might be worth as companies."
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