YouSaid · the spoken record

James Chanos

lines on the record: 74
first: 2018-05-11
most recent: 2018-05-11
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“What Michael Monason said. And then, of course, the size, right? I mean, you know, it's a lot easier to beat the market if you're running 15 million than a few billion.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“If we sold the stock short before anything happened, we earned six or seven percent annually on the cash proceeds. And we split that with the prime broker. And now that number more recently was zero. And that was a significant source of returns. So, I think that that's one aspect, particularly for fundamental short sellers. But look, I mean, markets have gotten more and more efficient. The more you have smart people pursuing something, the tougher it's going to be to beat the market. That's just a given, I think.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's, I have a little bit of a vantage point because not only am I a manager, but I also sit on some investment committees, a reasonably large investment committees. So I get to see the pitches. I get to see the pitches and I get to see the results from a lot of people in the industry as someone who allocates capital. And I have to tell you, I mean, the industry is wanting. And it's wanting across the board. And alphas have dropped, including our own, over time, whether they've been competed away. Now, another theory I have, of course, being on the short side, is that lower interest rates, particularly for short sellers, have reduced rebate income. And so when I started in 85.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“They did, yes. They did, in fact, both, interestingly, both of those companies sent teams of engineers to help Elon get the model S out.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you're a little late because Toad and Daimler did do joint ventures with Tesla 10 years ago and sold all their stock.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“And now the Model 3 is maybe problematic. And so you've got an issue here where you've got basically a $50 billion market gap, which, by the way, is almost the same as GMs and is exceeds Ford's, which is amazing. You'd be buying a company just as big as yourself to basically lose money and have a little cachet. I don't see it.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Just using them as an example, it might be, but the problem is, of course, that GM's cruise software is now better than Tesla's autopilot.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the problem with that is that GM, for example, the reason you would buy Tesla ostensibly is because of technology, not because of manufacturing process. For sure. They're manufacturing process is actually pretty poor. The Model 3, their new car appears to have lots of issues upon production. So you would be buying them for Elon's vision or their technology.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“And it is stunning as to how many senior executives have left this company in the last two years. The only two companies that we've seen in our history with a similar executive departure pattern were Valley and Pharmaceuticals a couple years ago. Yeah. And a little company in Houston called Enron. And it is never a good sign when almost all your senior executives are leaving at the stock price at a high. That's telling you there's something wrong. And I don't know what it is, but almost all the senior executives at Tesla see something and are leaving stock option packages on the table.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Yep. And so there's a lot going on there. And that's part of, I think that's part of the allure of the company and its valuation is the CEO. The problem, again, is that he's up against serious competitors in his core business. And then finally on that, we track executive departures. We have this list we put out.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Flamethrowers and hats. Yeah, I mean, but we're laughing, but that's kind of a problem, right? Because you have a CEO who's kind of all over the place. We believe actually his passion is SpaceX. Sure. I think he's going to actually hand over the reins as CEO at some point in the next few years and move full-time over to SpaceX.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Which is a gorgeous car, and it's coming out next year and is a sports car designed from the bottom up from, I believe, their Le Mans team. And so now Tesla is in a scrum. They're going to be competing with well-financed. Operations with good RD, whose technology is probably well ahead of theirs at this point.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“And I know you're a car guy, Barry, and so you know that, and suddenly you have this Model S, which was a car that was aspirational, car you wanted to drive up to the country club or to, you know, the restaurant valet, and everybody wanted one. And the problem is, of course, the Model S now is seven years old. And finally, finally, the Europeans and Detroit and ultimately Japan are coming with their vehicles. We have Audi and Jaguar coming this year with very good-looking, sexy crossover cars. And then near and dear to your heart, we have Porsche coming out next year, Missione.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a great question, Barry. I think they were a paradigm shift six or seven years ago when they introduced the Model S. And I have always said the Model S was an important car because Musk made EVs, electric vehicles sexy, right? Prior to that, any type of green vehicle was a compromise”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think the stock might not be worth anything on a pure financial analysis basis. It is to us, it's one of the Bellwethers of this market. It is a hopes and dream stock that investors have pinned really whatever their expectations are on a future, a green future globally. They have put it on this stock and on this CEO who has done a really good job in promoting that very vision. The problem, of course, is that it's an automobile company. And it's increasingly having problems making automobiles. And soon is going to be facing much more competition from people who do know how to make automobiles.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“And it was a treasure trove. It was letters going back and forth from the state regulators to Baldwin basically saying they were insolvent and that they needed to raise capital immediately and that they would no longer be allowed to use insurance company money to make acquisitions and blah, blah, blah, blah. It was the whole story laid out in public documents. And so, yeah, and years later, I was at an insurance conference and I heard the same voice from behind me. And it was a well known insurance analyst who at the time was in Chicago. And he could not cover Baldwin. His firm would not let him because he looked at it and saw it was a house of cards. And the firm had sold annuities, so they told him to shut up. And I've always kept him anonymous ever since. But it was that tip that helped.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“I got a phone call one night. I was working late at the office and it was someone who wouldn't give me their name and said, I understand you're asking questions about Baldwin United. And I said, yeah, who's this? And he said, it's not important who this is, but you should be aware that there are insurance files at the state of Arkansas insurance department that are public that you should get. And, you know, click. Arkansas. In Arkansas. And so the next morning I told my boss that, and he, of course, asked if I'd been drinking. And I said, you know, no, I got an anonymous call and we should check it out. We hired a local law firm.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“So I was a young analyst, I had no insurance analytical experience, so I had to sort of start at ground zero, which I think at the end of the day was helpful for me because I had to learn basically from scratch. And it was while I was making phone calls and trying to understand how it was that Baldwin could use insurance company money to do acquisitions. That was sort of the game that they were playing.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“The fastest growing financial services company in the United States in 1982. And it was Fortune's Most Admired, blah, blah, blah, blah, blah. A lot of things that we would see later, 20 years later in the Enron story, were basically indicative of Baldwin back then.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“A blockchain companies. Well, their CEO was a charismatic guy, and he made his market, the company, selling pianos door to door. And I've always said, if you can sell pianos door to door, you're a pretty good salesman. And Baldwin”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it wasn't received very well, as you can imagine, particularly since the big brokerage firms who were recommending stock were also making a fortune selling their annuities. And so I think it was a...”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it was basically peaked at $1,000 in 1966 and bottomed out at 700 something in 82. But as you say, in real terms, it was a disaster. And so I got a job as an analyst doing deal books. But I was fascinated with the market and always had invested whatever spare money I had in the market in college. My dad had pushed me to sort of learn about it. And the head of retail sales was down the hall. So I used to spend my lunch hours and after work talking to him. And ultimately he hired me in 1982 to come work at a small firm that he was forming, leaving Blythe Eastman, Payne Weber, and forming Guilford Securities. So I went there as a securities analyst. And that was fantastic. He gave me latitude to do whatever I wanted to do. Long shore.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“When I got on to Wall Street, the first gentleman who hired me in 1980 was completely puzzled as to why anyone would want to work on Wall Street. Because in 7980, it was not a lucrative field. We were at the tail end. We didn't know it of a 16-year bear market. And in fact, from 1966 to 82, in real terms, the Dow dropped as much as it did in 2932”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it means literally dog-like, but the Kinicos were a group of philosophers who lived outside of Athens in the Golden Age. And they basically were searching for the ultimate truth. They believed in independence of thought and self-discipline, and Diogenes was their philosophical leader. But it's the root of the word cynic in English.”
2018-05-11 · Masters in Business · James Chanos Discusses Investment-Driven Models · IDENTIFIED FROM THE TRANSCRIPT · source