...today in his piece, "Is China the Next Enron?" The Times columnist and author lectures the billionaire hedge fund manager and offers his own take on investing in China:
It may be that we haven’t seen anything yet.
You see, Friedman has actually been to the Far East and has asked the tough questions that Chanos has apparently overlooked:
...after visiting Hong Kong and Taiwan this past week and talking to many people who work and invest their own money in China, I’d offer Mr. Chanos two notes of caution.
The first is another one of Friedman's famous home-spun aphorisms:
First, a simple rule of investing that has always served me well: Never short a country with $2 trillion in foreign currency reserves.
The second is essentially a list of all the conventional reasons to be bullish on China. But short-sellers like Chanos aren't normally swayed by the conventional wisdom. In fact, they're contrarians who dig beneath the surface to uncover the truth. That's how Enron fooled the world and Chanos got rich.
Friedman ends his piece by taunting Chanos:
Still, I’d rather bet against the euro. Shorting China today? Well, good luck with that, Mr. Chanos. Let us know how it works out for you.
I have my own taunt: Shorting Chanos today? Well, good luck with that, Mr. Friedman. Let us know how it works out for you.
You'll have to excuse me now. I have to go buy some euros.
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