Being pessimistic about the markets has been a good strategy for James Chanos, a legendary short seller, but a good 2013 for investments around the world has boomeranged on him, with his Kynikos Opportunity Fund – Greek for cynical – losing 14 percent.

It was the second consecutive year of bad bets for the fund, which dropped one percent in 2012. The bigger decline last year came as the S&P 500 gained 32%, driving losses for investors who bet against stocks as he famously has, often reaping big dividends in the process.

The Wall Street Journal, in an analysis of Kynikos, noted that hedge funds, including his, can bet on rising markets and also profit from falling ones.

It was a rare misstep for Chanos, who was one of the first to spot trouble at the scandalized Enron Corporation and whose manages at least $4 billion across several funds, according to regulatory filings.

The performance for its other funds wasn’t included in the document and he didn’t respond to the Journal’s request for comment.

Before 2012, however, he was riding high with double-digit gains for the previous five years, including a 19 percent jump in 2008 at a time when many other hedge funds were faring poorly as the world recession got under way.

Chanos told the Journal last month that he was still betting against Caterpillar Inc., the world’s biggest maker of construction and mining equipment. Caterpillar dropped 16% in 2013 but has rebounded modestly this year, helped by aggressive cost-cutting that helped it beat analysts’ earnings expectations.

“The only reason they beat [estimates] was because of two one-time items,” Mr. Chanos said. “This is a company that, if you go back to last year’s earnings release, in January 2013, their outlook was wildly off the mark.”