Mr Einhorn is definitely a very smart person. I have seen him in action on Youtube. I hope he recovers soon. When bad luck strikes, even less smart people like me can outperform smart people like him. I am down quite badly so far in 2018. The worst since 2012. Einhorn's market-neutral long-short equity fund got hurt by his shorts in Jan2018. He got hurt by his longs in Feb2018. He is down by almost 12% by end of Feb2018 for the year. Tough luck. Hope he recovers as he predicts a reversion is coming soon. https://www.reuters.com/article/us-...ruary-off-11-9-percent-for-year-idUSKCN1GD3ES Greenlight Capital tumbled 6 percent in February almost the same amount it lost in January, raising the New York firm’s loss for the year to 11.9 percent, a performance update sent to clients and seen by Reuters showed. The broader Standard & Poor’s 500 stock index has gained 1.5 percent in the first two months of 2018. Einhorn addressed his firm’s poor start to the year earlier in February when he discussed results on an earnings call for Greenlight Capital Re., the reinsurance company where he is chairman. “While we’ve never underperformed like this, our prior worst underperformance compared to the S&P came in March of 2000, which was a similar environment,” Einhorn said. Einhorn has long bet that certain technology stocks including Amazon and Tesla would fall but his short bets appear not to have helped him even as stocks faltered in February.
It's a lot easier to make money (on a percentage basis) with a small amount of money (couple hundred thousand) vs. large amount (several billions). Even Buffet can't produce anywhere near the kind of returns that he was running when he had less money to manage. Don't worry though, I think active managers will do better in the future once we get to the point where passive investing becomes active selling.
This explains why dumber retail investors like me can outperform smarter investors like Mr Einhorn. I handle far smaller sum of money without the pressure of disappointing outside investors. I actually feel more pressure handling other people's money than my own. The pain is lesser when losing my own money, assuming it is an affordable loss.
I agree. Not only that, if you're managing other people's money, they don't understand your strategy like you do. So if you start losing money, they jump ship quickly which will make the situation worse by forcing liquidation at often the worst possible time.
I don't think you are dumb and he is smart. It may just be the opposite. He was lucky until he got unlucky.
Haha. Thanks for your compliment. I don't think I am dumb but I am pretty sure Mr Einhorn is smarter. Best of luck to him going forward.