Jim Chanos: The Madness of Markets

During his recent interview with The Odd Lots Podcast, Jim Chanos had some interesting things to say about current market absurdities. On Bitcoin “treasury” companies, he’s said: “It’s rarely that I have to increase my personal security after a podcast… but I had to do after our last podcast together when I said some intemperate things about Bitcoin Treasury companies.”

His critique? “You’re on the opposite side of the trade… buying the pieces of paper that have infinite supply so that Michael Saylor and I can buy the digital asset with the limited supply.”

The result? “There’s nothing proprietary here… other companies will do this,” and indeed, “there’s over 200 globally now.”

New York real estate? Chanos is equally skeptical. “I’m glad I sold my apartment last year,” he quips, noting that publicly traded REITs like SL Green trade at “a 5.2% cap rate… I think it should be seven or eight.”

His reasoning is that you can get four and a half percent by buying a treasury. The math doesn’t add up, especially with “real depreciation” and “maintenance capex in New York City [being] pretty high.”

Then there’s Carvana, a stock that’s “up 100x” after crashing 99%. Chanos zeros in on the accounting: “They are making more than 100% of their pre-tax profit from gain on sale of loans… subprime loans.”

Strip those away, and “they’re losing money.” Worse, “delinquencies are starting to skyrocket” in subprime auto—a red flag given Carvana’s roots in DriveTime Finance, a company that “collapsed in the first subprime blowup… in the late 90s.”

Private equity isn’t spared either. Chanos recalls reviewing returns for a nonprofit’s portfolio: “We’re doing 10% 11%… and we can look at the S&P and say… I’m doing better in that, and I’m liquid.'”

His verdict? Private equity’s “golden days are over,” with returns now resembling “high single digits, low double digits”—hardly justifying the illiquidity or fees.

On AI hype, Chanos draws parallels to the dot-com bubble: “Nvidia’s revenues are about half of 1% of U.S. GDP”, Cisco and Lucent were the same in 2000. The risk? “If people pull back, they can pull back capex very easily,” triggering a profit collapse like 2001–02, when earnings dropped “about 45%.”

And Tesla? Chanos shrugs: “Nobody cares… You could see Elon robbing a Brinks truck with a mask on, and [investors would say], ‘Oh, that’s Elon.'” It’s the ultimate “hopes and dreams” stock—until reality bites.

Chanos’ lesson? “Only short the stocks that go down.” But in today’s market, even the worst ideas can defy gravity. As he puts it: “The idiosyncratic opportunities have probably never been greater.” For investors willing to dig into the numbers, the cracks are everywhere.

You can watch the entire interview here: