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| It's good time to short China's stock |
China, which has been another favored short for Chanos, was also looking up from a short perspective because of its crackdown on corruption. And the two areas that he think are feeling it right now are luxury goods and real estate. It's one of the reasons real estate transactions have collapsed in China this year.
Caterpillar is a very diverse company. A big part of their profits are in mining, which continues to decline. The stock is trading above a market multiple for a cyclical company, where even the management has said they think trough earnings could be $3.50. Chanos, who has said considered his Caterpillar short his best investment idea of 2013, also noted that the value of mined commodities, such as coal and iron, keep dropping.
The next two are flight capital in terms of foreign real estate and art—Sotheby's—and Macau. We're getting increasingly concerned that a crackdown's looming in Macau.