The year before last could have gone better for David Einhorn. A lot better. Any year in which a 15% drawdown would have been a substantial improvement is one hedge fund managers would like to quickly forget, but which their investors aren’t likely to—especially when the markets go all topsy-turvy to start the next one. But David Einhorn’s accolytes—a.k.a. Greenlight Capital’s LPs—didn’t panic, not even when his Twitter feed appeared to offer a cryptic announcement that he was giving up on the whole hedge fund game, when it in fact was a completely literal announcement that he had lost an actual poker game. They stayed firmly seatbelted in Einhorn’s Honda Odyssey and stuck around for the ride, for which they have been rewarded. Not with all of the money they lost in 2015, but with about half of it.
Greenlight Capital, the hedge fund led by David Einhorn, rose 1.6 percent in December, riding a year-end rally in U.S. stocks.
The performance rounds out a gain of 9.4 percent in 2016 for the firm’s main hedge fund, which mostly makes wagers on stocks, according to an e-mail viewed by Bloomberg.
And it could have been even better, if only Einhorn could have foreseen the President Trump era and the industries it would Make Great Again—all of which were in Greenlight’s short book.
Einhorn has said this year that the firm lost money on its short portfolio, which includes wagers against energy companies he’s called the “mother-frackers” and a “bubble basket” of stocks including Athenahealth Inc. Greenlight’s largest disclosed holdings at the end of the third quarter, Apple Inc. and General Motors Co., rose 10 percent and 2.4 percent, respectively, in 2016, according to data compiled by Bloomberg.
Einhorn’s Greenlight Recoups 9.4% in 2016 as Stocks Rally [Bloomberg Quint]