David Einhorn Is Still Not Dead Yet

D-Hornz going to stay the course, even if it kills him.
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Things aren't getting any better for David Einhorn after Greenlight had its worst month since 2008 in January.

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You might recall that last year was rough - David was up just 1.6% compared to the S&P's mammoth gains and a 6.5% return for the average hedge fund. And January didn't bode well for 2018 as the "bubble basket" continued to get more "bubbly".

Here's a quick recap because you know, why not rub it in?...

Last year was not a fun one for David Einhorn, who managed only a relatively miniscule return while both investors and his wife abandoned him. The former was primarily the result of a world turned upside down: For if Donald Trump can be president, why should Elon Musk be held to the established standards of what constitutes a good investment? Why shouldn’t brilliant financial innovations be laughed at and ridiculed?

Einhorn has acknowledged that he feels like he’s “been running face first into the wind.” But he’s not giving up. “We don’t intend to capitulate and are sticking to our strategy.”

Well, that "strategy" didn't fare well in February either or actually I guess that's not entirely accurate - rather, it performed "as expected" given the long positions.

On this morning's earnings call for Greenlight Re, Einhorn noted that "we’ve never underperformed like this" after saying he's in the midst of his worst stretch since March of 2000.

The environment in February "remained difficult for the portfolio" he continued, adding that it "didn't underperform materially" considering the longs.

So I guess that latter bit is a positive (?).

I don't know, but something tells me David's "partners" are still pretty goddamn "frustrated" (as he put it in his last quarterly letter).

But don't worry, because he also said on Wednesday that a "reversion" in markets may be "coming soon".

So you know, just hang in there because tax reform is going to benefit his long bets and eventually, "the market cycle" is going to "turn" (even though he suggested last year that might actually never happen).

You know what they say about irrational markets, right? Something about how they never stay irrational longer than you can stay solvent...

Related

David Einhorn Said No To A Capital Raise, Kept The Door Open For A Pub Crawl

Remember how David Einhorn got in trouble in England for insider trading on Punch Taverns stock and he was all "what?" and we were all "what?"? Well, you can judge it for yourself because now the entire disputed call with Punch is available online (at the back of this). So go read it, or read the highlights here. The FSA still thinks it's insider trading, but the count of people confused by the whole thing is rising, and now includes the Merrill banker on the call. There's lots of insider traderiness on this side of the pond today too so we should talk about that in a bit. For now, though, two other things. One is quick - no one can resist one part of the call and I can't either so here it is: DAVID EINHORN: Hi, I’m sorry I didn’t get to see you when you were in New York. PUNCH CEO: No, no, we -- well, we’ve -- we’ve only had the chance to speak once, although we have seen [reference to Greenlight Analyst] a few times since then. DAVID EINHORN: Oh, you’re -- you’re -- you’re getting more than -- than I could help with anyway. So, this is good. PUNCH CEO: Okay. That’s fair enough. Well, one day we’ll get you around on a pub crawl around some English pubs. DAVID EINHORN: Oh, that sounds fun. PUNCH CEO: It is. You’re right. English readers: Is it? I just assumed that Punch Taverns are rather grim places, like TGI Friday's but with more ... punching? ... but maybe I'm totally off base here. Also, here is a hypothesis: vice investments do well because, for the same level of profitability, they get more analyst/investor coverage and enthusiasm. Wouldn't you rather go on a pub crawl instead of like a tour of an auto parts factory in Queens? Would that influence your stock recommendations / money allocations? Someone should do a study.