Chanos Says Petrobras, Vale Are Two of His Favorite Shorts By Jesse Westbrook# Stock
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Chanos Says Petrobras, Vale Are Two of His Favorite Shorts
By Jesse Westbrook - Nov 19, 2012 1:32 PM ET
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Jim Chanos, who oversees $6 billion at Kynikos Associates Ltd., said he’s
betting against Brazil’s Petroleo Brazileiro SA (VALE5) and Vale SA (VALE3)
, adding that investors buying the stocks risk subsidizing failed government
policies.
“Increasingly, these state and capitalist marriages end up giving
capitalists the short end of the stick,” the hedge-fund manager said at the
Ira Sohn Investment Conference in London today. While Brazil is “resource-
rich,” its state-backed companies are overvalued, Chanos added.
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Petroleo Brasileiro’s annual expenses are eating up its cash, Chanos said.
Investors betting that the company’s shares will rise are assuming that
future oil exploration will boost returns while production is actually
declining, he said.
Vale, the world’s biggest iron-ore producer, is reliant on exports to China
, Chanos said. With growth in the Asian nation slowing, Vale’s prospects
are worsening, he said.
“This is a company expanding into a glut that is about to fall,” he told
the conference.
By Jesse Westbrook - Nov 19, 2012 1:32 PM ET
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Google +1
0 Comments
QUEUE
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Jim Chanos, who oversees $6 billion at Kynikos Associates Ltd., said he’s
betting against Brazil’s Petroleo Brazileiro SA (VALE5) and Vale SA (VALE3)
, adding that investors buying the stocks risk subsidizing failed government
policies.
“Increasingly, these state and capitalist marriages end up giving
capitalists the short end of the stick,” the hedge-fund manager said at the
Ira Sohn Investment Conference in London today. While Brazil is “resource-
rich,” its state-backed companies are overvalued, Chanos added.
Sponsored Links
American Express—Savings
0.90% APY With A High Yield Savings Account From Amex...
AmericanExpress.com/Pe...
The Volkswagen Tiguan
Customize and configure a 2013 Tiguan. Compare now at...
vw.com/Tiguan
Mortgage Rates hit 2.13%
$150K Mortgage $581/mo. 2.35%APR. Easy Gov't Program ...
www.LendGo.com
Buy a link
Petroleo Brasileiro’s annual expenses are eating up its cash, Chanos said.
Investors betting that the company’s shares will rise are assuming that
future oil exploration will boost returns while production is actually
declining, he said.
Vale, the world’s biggest iron-ore producer, is reliant on exports to China
, Chanos said. With growth in the Asian nation slowing, Vale’s prospects
are worsening, he said.
“This is a company expanding into a glut that is about to fall,” he told
the conference.