From Barrons:"Could you talk about a mistake you made and what you learned from it?
At the dawn of the digital age, when we shorted AOL[AOL] back in 1996, it basically went up eightfold on us. Although it didn't put us out of business, it certainly caught our attention. We learned about timing. Interestingly, as Time Warner[TWX] found
out later, the accounting issues were actually very real. Their churn was actually much higher than they were letting on. But we also had a healthy regard for the ability of corporations to be gullible and to fall for the same hot trends as everyone else. You can never get the timing exactly right, even if you are right on the fundamentals, ultimately. But on the other hand, you can be very, very right and still lose lots of money, so you have to construct your portfolio accordingly and never let one position ever be too large. That was a good lesson, and it probably saved us a lot of money."
Dec. 5 on Bloomberg. His area of expertise is stock selection. Short selling adds to efficiency.
"Moving on, Chanos tackled an even bigger storyline on Wall Street — the belief that the economy is being hurt by too much regulation and uncertainty. This narrative just "doesn't hold" when you look at the numbers, Chanos said. For example, The Fed Register of financial regulation has grown just as much under President Obama as it did under President Bush.
And as for investment: "They say people are holding back investment ... and again, the numbers belie that," said Chanos. "Domestic GDP investment in the U.S. is back up just about to pre-recession levels and bottomed out in 2009, 2010 ..."
The problem, he said, is actually that "the investment we're all looking for is actually saving labor ... Look at what the internet is doing to retail," he added.
According to Chanos, investing in technology that makes things more efficient doesn't save jobs. So we're looking at a capital-labor tradeoff that's been going on for years. In the early years of the Bush administration this was masked by strong construction jobs but since the housing market collapsed, those are gone."
Long time readers of this blog will know this lines up pretty well with my views on structural unemployment.
Those wishing to see the video on Bloomberg.