Jim Chanos and His Big China Short

Legendary short seller Jim Chanos was on SquawkBox Thursday morning, talking markets and some of his individual positions.

Here are some highlights:

Will the Market Uptrend Continue?

• Doesn’t have a direct view on the markets
• Corporate profits as a part of GDP are all heading in one direction, and thats a concern.
On Herbalife HLF:
• Chanos stated that his company no longer has a stake in the company, although he has shorted it in the past -Not crazy about multi level marketing
• Thinks Bill Ackman is correct that when your customers are your distributors, you have a flawed business. -Scientifically the product provides no value
• If you don’t sell a product that has value, you will
• Covered when share prices cut in half in November to take profits

On Dell DELL:

• Was short on Dell, covered on single digits last year
• Shorted the stock again on the deal -Revenue dropped from 4.7B to 2.3B last year
• The problem with Dell model is that you get paid up front, so it has tons of payables, therefore it only actually has a few billion in cash, not a giant pile.

The Last Word:

• Avoid anything having to do with Chinese property markets: Steel, Iron Ore, etc
• Australia will feel the effects soon -Property bubble is growing bigger and bigger
• Anything dependent on the Chinese economic miracle you should be careful of