Buffett vs Chanos
An interesting battle is now in play. Buffett has just bought Exon (XOM) whilst Jim Chanos is shorting it.
I am not sure who wins this bet, however I am slightly leaning toward Jim Chanos’s thesis.
We will sit this one out, however there is always the possibility of a spike in oil prices over the medium to long term and an appropriate exposure to well run energy companies is rational. We are still looking for an energy company that we feel is reasonable value. The large players are looking expensive when compared to their declining reserves and there are so many frauds in the smaller players that we are very wary of this end of the sector.