The tarnishing of a hedge fund legend. By Michelle Celarier May 16, 2018 AddThis Sharing Buttons Share to FacebookShare to TwitterShare to More It was April 23, the day of the 23rd annual Sohn Investment Conference, and David Einhorn was wearing his lucky tie. Since Einhorn’s Sohn debut 16 years ago at the age of 33, the annual cancer charity conference has arguably become the hottest ticket on the hedge fund circuit, attended by thousands of investors eager for stock tips from the financial cognoscenti. Last month they sat in a darkened David Geffen Hall in Manhattan’s Lincoln Center, waiting patiently as Einhorn, the last speaker of the day, strode onto the stage. “New suit, same tie,” Einhorn quipped as a photo of himself in 2002 flashed on the slide behind him, showing the gaudy, multicolored piece of silk that had been the least geeky thing about the tousle-headed investor when he had worn it at his first Sohn and wowed the investment world. Einhorn, a billionaire whose Greenlight Capital hedge fund is one of the world’s most watched, has always been a big draw at the conference. Now 49 years old, he is still a boyish-looking nerd — although his hair is now fashionably spiky, his suit is better cut, and his white shirt boasts a spread collar, not a button-down. Yet, as many in David Geffen Hall were acutely aware, channeling his past cannot change the hedge fund manager’s flagging fortunes. This year Greenlight lost 14.9 percent through April, while the S&P 500 was down 0.4 percent — the latest embarrassment for a former star who has not bested the stock market since 2009. Even before this year’s debacle, in 2017 investors had already yanked more than a third of Greenlight’s redeemable capital, a stunning loss of investor confidence that has never before been publicized. From a peak of $11.8 billion in 2014, Greenlight’s assets had shrunk to $6.4 billion by the end of 2017. https://www.institutionalinvestor.com/article/b1875gtp13qqyq/what-exactly-happened-to-david-einhorn
Is this a "don't confuse brains with a bull market situation"? If not, it is scary to think one could have a multi year underperformance like this, much less a 1450 basis point underperformance in 4 months.
Actually it makes total sense why he's underperforming. The best performing stocks in the last few years have been stocks that look terrible under fundamental analysis (amazon, tesla, nflx, etc). His strategy would be to short those stocks and buy others (which haven't performed as well in this bull market). He started his fund with 900k and he's worth billions. I wouldn't call his total trackrecord a fluke. More likely this environment doesn't suit him. Eventually it will change (as all markets do) and he will earn again.
Exactly. I agree with you. Value investing will never stop working permanently although there will be time when it will stop working temporarily. Mr Einhorn is going through a bad patch which happens to everyone. The good days of value investing must return eventually.
I'd wait for an uptick in his performance, just to make sure he's got his bearings and is in sync again.