Jim Chanos, the hedge fund investor best known for his prescient bet against Enron, has a new company he's betting against: Caterpillar (CAT).
The founder of Kynikos Associates thinks that the industrial equipment maker will be a victim of a slowdown in commodities.
"I believe the commodities super-cycle built on the back of the Chinese construction boom is coming to an end," Chanos said before an audience at the CNBC Delivering Alpha conference in Manhattan on Wednesday.
Commodity prices have been mostly booming since 1990, but those prices should revert to historical means "with a viciousness" in the next 10 years, Chanos said.
Roughly half of Caterpillar's profits are tied to the capital expenditures of global mining companies, he explained. While there's been a general acknowledgement that global mining expenditures will decrease, it won't happen gradually, as most people have predicted, Chanos believes.
Chanos said the equipment maker's problems could be compounded by its accounting practices. He questioned the method Caterpillar used for marking recent acquisitions on its books. Caterpillar has already run into accounting troubles this year: The company took a $580 million write-down stemming from what it called accounting misconduct at a Chinese mining company it acquired in mid-2012.
Caterpillar's stock is down nearly 2% Wednesday following Chanos' short call.
Not all of Chanos' short bets have worked out as well as Enron. At CNBC's Delivering Alpha conference in July 2012, he told the audience he was betting against Hewlett-Packard (HPQ), the struggling printer and computer equipment company. Since then, its stock is up 39%.
Still, Chanos says he thinks his bet against HP will eventually be a winning one.
First Solar shares spiked more than 50% Tuesday, rising to a new 52-week high and triggering several circuit breaker on the way up after the company issued a bullish forecast for the year.
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Herbalife's stock dropped nearly 4% Thursday, its second straight day of sharp drops. The vitamin maker's stock dropped more than 12% Wednesday, after CNBC reported that Ackman had been betting against the stock for most of 2012. MOREMaureen Farrell - Dec 20, 2012 12:52 PM ET
Abercrombie & Fitch's stock surged more than 30% Wednesday, logging the biggest one-day jump since its stock market debut in 1996.
The big move came as the teen retail giant posted its first quarter of year-over-year profit growth in a year. For the three months ended Oct. 27, Abercrombie earned $71.5 million, or 87 cents per share, up 40% from a year earlier. Overall revenue rose 9% for the quarter to MOREHibah Yousuf - Nov 14, 2012 12:16 PM ET
Renowned bear investor Jim Chanos called Hewlett Packard (HPQ) "the ultimate value trap."
Chanos outlined his vision of how the inevitable death of the personal computer will affect the broader technology industry, but said Hewlett Packard was the company most precariously perched on the edge of obsolescence.
Hewlett-Packard has been hiding its research and development within its $37 billion worth of spending on acquisitions in the last few years, Chanos, president and MOREMaureen Farrell - Jul 18, 2012 3:14 PM ET
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