Jim Chanos: “Radioactive” Stuff Often In Plain Sight

Jim Chanos is not afraid to admit that his first foray into short-selling was a kind of baptism by fire. On a Bloomberg interview conducted by Barry Ritholtz, Chanos recalls how in 1982, when he was a budding analyst, he recommended a short on Baldwin-United, a piano maker turned insurance company. Sensing that all was not well with the accounting practices surrounding the annuities that Baldwin sold, Chanos recommended selling the stock, then trading at about $25. The timing was unfortunate: it was August 17, 1982, and Kaufman had just called a market bottom.

Though the stock...