David Einhorn Made Money With These 5 Investments
David Einhorn, president and founder of Greenlight Capital, recently issued his latest quarterly letter to investors. The hedge fund superstar posted impressive gains for the fourth quarter and full year. With the help of five big winners, his long positions modestly outperformed the broad market.
Greenlight Capital’s funds returned a net 6.5 percent in the fourth-quarter, bringing the full year net return to 19.1 percent. Since inception in May 1996, the hedge fund has returned 19.5 percent on an annualized basis. Einhorn notes that he does not expect to keep pace with a soaring market, but warns that Mr. Market will serve a dose of reality to high-fliers.
“The parabolic rise of a growing number of market-leading story stocks created a challenging environment for value investors. Speculators have momentarily accepted the ruse that, for these visionary companies, profitability would be a mistake. Eventually, the market will remember that having a disruptive product that customers will happily buy if sold near cost is not the same as having a valuable business. Philosophically, since we would not expect to be long these high- fliers, the best we can hope to do is not be short them at the wrong time. For the most part, we weren’t.”