After three years of losing money, Jim Chanos is back

Jim ChanosBloomberg TV screenshotJim Chanos, the founder of Kynikos Associates.

Short-seller Jim Chanos, the founder of hedge fund Kynikos Associates, has been a huge China bear
since 2009 and the bet is finally starting to pay off.

The Wall Street Journal’s Juliet Chung reports that his Opportunity fund, which bets on stocks, gained 4% in August and was up about 10% for the year through the beginning of September.

Kynikos’ Ursus and Kriticos funds, which only short stocks, were up 6.2% and 8.2%, respectively, in August, the report said.

Chanos’ negative bet on China played a role in those fund returns. The Opportunity and Kriticos funds have about 20% of their funds dedicated to short bets in China, the report said.

Chanos lost money in each of the last three years, according to the report.

From 2012 to 2014, short-biased hedge funds got crushed, falling more than 37%, as the market surged, with the S&P gaining more than 63% during that time period.

The average short-biased fund was up 4.36% in August, according to Hedge Fund Research. For the year, they’re up about 2.5%.

Meanwhile, the average hedge fund fell 2.21% in August and is down about 1% for the year, compared with the S&P 500, which fell 6.2% in August. The S&P was down 7% for the first eight months of the year.

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