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Friday, 9 December 2016
Last updated 34 min ago
Feb 10 2014 | 11:43am ET
Short-selling was bad business last year, when stocks soared. Unfortunately for Kynikos Associates' founder James Chanos, it is the business he's in.
New York-based Kynikos' Opportunity Fund fell 14% last year, its worst annual performance in at least a decade, The Wall Street Journal reports. The huge decline was also Kynikos' second-straight losing year; the fund fell by less than 1% in 2012.
The last two years have been an abrupt change for Kynikos, which enjoyed double-digit gains in four of the previous five years.
The Standard & Poor's 500 Index rose 32% last year, catching short-sellers like Kynikos off-guard. But in spite of last year's big loss, the hedge fund manager remains bearish, telling investors at a Morgan Stanley hedge-fund event last month that he remains skeptical of Chinese real-estate developers and of coal-related investments. Chanos is also still short Caterpillar—one of his few successful shorts last year, but a stock that has posted gains this year.