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Delivering Alpha: Where Fund Managers Are Placing Their Bets

PART:
1 2 3 4 5 6
Part 3
Delivering Alpha: Where Fund Managers Are Placing Their Bets PART 3 OF 6

Is Jim Chanos Giving Credit to President Trump for the US Market Rally?

Jim Chanos at the Delivering Alpha Conference 2017

 Jim Chanos, a billionaire investor and a well-known short seller in the hedge fund industry, shared his view on the market (QQQ) (IWM) and various stock picks at the 2017 Delivering Alpha Conference.

Is Jim Chanos Giving Credit to President Trump for the US Market Rally?

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Jim Chanos on the market rally

In the above part, we saw that the US market (SPY) has shown a strong rally since the US presidential election in November 2016. Major indexes of the US such as the S&P 500 Index (SPY), the Dow Jones Industrial Average (DIA), and the Nasdaq Composite Index rallied 10.6%, respectively, on a year-to-date basis, as of September 14, 2017.

Jim Chanos said providing credit to President Donald Trump for the strong rally in the US market is a “stretch.” He also said, “There’s the general view that what’s worked will continue to work. To put it either pro or con on the basis of President Trump’s policies is, at this point, a stretch.”

The optimistic view on the US economy (IWM) (VOO) and the expectation of huge reforms under President Donald Trump mainly drove the market in late 2016 and early 2017. Currently, markets have expectations we could see tax reform pass by the end of the year. If it happens, then we might see a further upside in the index level.

Global markets

Jim Chanos also believes that not only the US market (VOO) but the global (ACWI) (VTI) equity market is going through a “synchronized bull market.” This has been mainly driven by major central banks’ persistent lower interest rates and easy monetary policies.

However, in the present situation, various reforms in major economies, structural changes in some economies, and improvement in economic activity and consumer demand are mainly driving market movement of the global economy.

In the next part of this series, we’ll analyze Jim Chanos’s view on Continental Resources (CRL).

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