David Einhorn
Background
David Einhorn is one of Wall Street's most closely watched investors due to his bold investment calls, both long and short.
Einhorn heads hedge fund Greenlight Capital, which has $7 billion in assets and has posted a 15.4% net return since inception in May 1996.
During the financial crisis, he famously questioned Lehman Brothers' books, arguing that the investment bank was being evasive about its risks.
Notably, he continues to lose money on bets against Amazon, Tesla, and Netflix as part of a bubble basket of internet stocks.
David Einhorn’s Greenlight Capital climbed 36.6% last year
Notes from videos:
Argues strongly against value investing and says that it is never coming back again due to changes in the market structure
The absence of people doing valuation means that nobody knows what anything is worth and the market doesn’t know what anything is worth. This causes stocks that already are highly valued to go up more and make them even more over valued such as Tesla because people don’t know it’s value and once the bubble pops and it drops by 50% people will wonder why.
His thought about why some companies keep coming out with record earnings even though the economy is slowking down: We have under invested into some areas which has allowed there to be a girth of capital placed into the companies. For example when was the last time we put a cement factory in this country or an oil refinery? This is gonna allow them to gain excess profits because they dont face any competition.
What I admire about him:
I like how he is always betting against the market. This shows his confidence and knowledge and the fact that he knows what he is talking about, he doesn’t say controversial things just to get exposure. This also makes him a person who leads by example. One of his main focuses are on stocks that he believes are over valued. He constantly mentions how the top over valued stocks in the market always gain more value as more people invest into them while nobody touches the under valued ones. A good example of this is Tesla. When the bubble pops and the prices drop, people would then think that they are getting a discount to the stock when in reality that’s how much the stock should’ve been in the first place so they buy in and this creates a constant cycle of bubbles.
Taking a look at his portfolio, it is very obvious that he likes to diversify and invest into all sectors. However, what sets him apart is that he mostly invests into high volatile stocks rather than the ones that gives a constant 3% yearly return. I believe this again goes back to his confidence about his work and being right. This is also the reason why his firm has been getting very high yearly returns due to the bold moves he makes.
I find due diligence to also be something he spends a lot of his time one. In his portfolio, most of the stocks he owns are unknown companies that many people hadn’t heard of before. So knowing that he is a man of confidence, a lot of research goes on in the background, specially considering how risky some of his investments are due to high voltalities of his portfolio.
The way he speaks:
A lot of eyebrow movements
Stutters a lot
Always smiles during his speech
Stretches some of the words to put emphasize
10 stocks he was holding in October:
