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Still, betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searchi

Still, betting against China will not be easy. Because foreigners are restricted from investing in stocks listed inside China, Mr. Chanos has said he is searching for other ways to make his bets, including focusing on construction- and infrastructure-related companies that sell cement, coal, steel and iron ore. This seems completely wrong. Here's a large-volume and presumably shortable ETF with Chinese holdings: http://finance.yahoo.com/q?s=FXI http://finance.yahoo.com/q?s=FXI If I remember, I'll try to put a short order on it in the morning to see if I'm right. Not sure how the Times and Chanos could say something so incorrect tho'.

garply 17y ago
Instead of shorting FXI, you can buy FXP, which will have a similar effect.
- mynameishere 17y ago
  The leveraged short and long ETFs have built-in decay which makes them unsuitable for anything but daytrading. http://seekingalpha.com/article/119316-double-and-triple-etfs-decay-their-value-faster-by-design http://seekingalpha.com/article/119316-double-and-triple-etf...
  - BearOfNH 17y ago
    I think it's unfair to claim "built-in decay" is unique to leveraged ETFs. This happens with all financial instruments: stocks, funds, ETFs, futures, options, etc. Any price that goes up X% and then down X%, or vice versa, ends up lower than the starting point. For any instrument. The only difference with the leveraged instruments is the corresponding loss is greater. But that's the whole point of using leverage -- the gain is greater, too.
    - byrneseyeview 17y ago
      No, it's completely fair. Leveraged ETFs rebalance in such a way that the losses compound faster than the gains. If they did no rebalancing (i.e. started out with $100M in cash and $200M in debt, and kept the $200M no matter what the equity price did) the decay wouldn't happen.
nandemo 17y ago
Not prohibited, just restricted: Investopedia explains Shanghai Stock Exchange Two main classes of stock for every listed company are traded on the exchange: A-shares and B-shares. B-shares are quoted in U.S. dollars, and are generally open to foreign investment. A-shares are quoted in yuan, and are only available to foreign investment through a qualified program known as QFII. http://www.investopedia.com/terms/s/shanghai-stock-exchange.asp http://www.investopedia.com/terms/s/shanghai-stock-exchange....

garply 17y ago

Instead of shorting FXI, you can buy FXP, which will have a similar effect.

mynameishere 17y ago
The leveraged short and long ETFs have built-in decay which makes them unsuitable for anything but daytrading. http://seekingalpha.com/article/119316-double-and-triple-etfs-decay-their-value-faster-by-design http://seekingalpha.com/article/119316-double-and-triple-etf...
- BearOfNH 17y ago
  I think it's unfair to claim "built-in decay" is unique to leveraged ETFs. This happens with all financial instruments: stocks, funds, ETFs, futures, options, etc. Any price that goes up X% and then down X%, or vice versa, ends up lower than the starting point. For any instrument. The only difference with the leveraged instruments is the corresponding loss is greater. But that's the whole point of using leverage -- the gain is greater, too.
  - byrneseyeview 17y ago
    No, it's completely fair. Leveraged ETFs rebalance in such a way that the losses compound faster than the gains. If they did no rebalancing (i.e. started out with $100M in cash and $200M in debt, and kept the $200M no matter what the equity price did) the decay wouldn't happen.

nandemo 17y ago

Not prohibited, just restricted: Investopedia explains Shanghai Stock Exchange Two main classes of stock for every listed company are traded on the exchange: A-shares and B-shares. B-shares are quoted in U.S. dollars, and are generally open to foreign investment. A-shares are quoted in yuan, and are only available to foreign investment through a qualified program known as QFII. http://www.investopedia.com/terms/s/shanghai-stock-exchange.asp http://www.investopedia.com/terms/s/shanghai-stock-exchange....