cho, page-98

If you haven't seen the Jim Chanos interview he did with cnbc yesterday, its well worth the listen to.

Were not calling for an impending crash of China was his words, but rather he is bearish or SHORT (as his fund focuses on) the China real estate bubble. His research shows that 30 billion sq. ft. of construction is underway which underpins a 55 space for every man, woman, and child in China.

I think Chanos has got it somewhat right. His timing may be a little off, but I agree that: "[I] would be very leery of any companies that are exporting raw materials into China to build up this real estate bubble." - Australia summed up right there!
I mentioned this when the AFR editorial [some months back] questioned the China syndrome. What happens when the music stops?
To cause a global stop - probably not. But, Australia will be hit hard. Given that we really never entered recession, unemployment hardly budged, record personal and national debt, house prices just being washed up with Government handouts - society has never really had it tough and when it hits, society will clam up.

I may be hitting the panic button too soon.
Whatever happens, those that are prepared will come out trumps. That is, those that have little if no debt.


This doesn't deter in buying brilliant businesses when price and free cash allows. Those businesses that will short term, be privy to the general market mood and be sold out of panic rather than the fear of going broke. Whitney Tilson of T2 partners in his year end annual letter, again, a must read for any value investor explains his approach during the months of panic, particularly the months of Oct 08 - March 09:

"In summary, we didn't panic and go to cash, nor did we try to predict the short term moves of the market. Instead, despite the pain, we stayed with our discipline during challenging times and were ultimately rewarded."

If its one thing to take away - time and time again: "Time is the friend of the wonderful business, the enemy of the lousy." Mr. Buffett.

Mr. Wilson certainly knows how to play the game and stick with it!