If you’re going to commit financial fraud, you probably don’t want to find yourself sitting at a table across from David Einhorn, who will know what you’re up to and share it with the world. Similarly, if you’ve never played poker and have only ever had a 15 minute tutorial on the game, you probably should avoid playing with the Greenlight Capital founder, whose vastly superior skills will demonstrate just how much you suck. As I like to live on the edge, yesterday in an undisclosed location, I choose not to heed the wisdom of the latter. Over several hands, Einhorn and I discussed the new edition of his 2008 book, “Fooling Some Of The People, All Of The Time.”
The latest version includes an epilogue, and concludes the story of Allied and Einhorn’s years of trying to get other people to listen when he said something was up. As we now know, Allied’s shares collapsed, Greenlight collected $35 million, and the hedge fund made another big (and correct) call on a bank called Lehman Brothers, whose failure was, according to Einhorn, “the Allied story all over again,” just on a bigger scale, with more resounding consequences. Even after the last crisis, which should have been a wake-up call, Einhorn doesn’t think we’ve changed much and if anything, the reforms passed only “encourage poor behavior and will likely foster an even bigger crisis.” He and I chatted about that exciting event, Quantitative Easing, Steve Eisman’s illicit pleasure of choice and more, plus poker tips for people who really, really need them.**
BL: You mentioned an unexpected and tremendous response from readers of the book the first time around. What’s the craziest piece of fan mail you’ve gotten- has anyone sent you their undergarments in the mail?
DE: [laughs] No, do you think they should?
DE: You’re hysterical.
BL: I mean, people do that. Musicians, rock stars get sent that sort of stuff. You’re like a rock star…of investing.
DE: Well, the thing is, my following [for the most part] is with 20 to 35 year old men. So, you know. I definitely don’t want their undergarments. Read more »
November performance. Read more »
October performance is here. Read more »
Back in February, the Wall Street Journal printed an article about a hedge fund “idea dinner,” more than insinuating that a bunch of representatives from Soros, SAC, Greenlight and Paulson and Co got together to enjoy a meal of food while scheming re: how they were going to take down the Euro. This was uncool for a few reasons, including by not limited to the fact that it’s unlikely the handful of managers assembled would even be capable of taking down the currency and the shoddy reporting that said they ate fish when in fact it was chicken (a tad undercooked, if you must know). Also, as a result of the story, the Justice Department’s antitrust division opened an investigation into possible violations of the Sherman Act. Read more »