Hedge Hunters: After the Credit Crisis, How Hedge Fund Masters Survived, 2nd Edition

Chapter 16

Jim Chanos

Out on the Short-Selling Limb

JIM CHANOS DOES what very few investors on Wall Street dare to do. He bets exclusively on stocks he expects to tumble. Chanos, who started his firm Kynikos Associates in New York in 1985, now runs about $4 billion, making his fund the largest of any dedicated to short selling.

Within five years of the launch of Kynikos—named for the Greek word from which cynic is derived—there were close to twenty short sellers, says Harry Strunk, who tracks these managers as the head of consulting firm Aspen Grove Capital Management. The most famous were the Feshbach brothers—Joseph, Matthew, and Kurt—whose assets eventually reached $1 billion. Most of these short sellers, the Feshbachs included, faded away ...