David Einhorn’s presentation from the 2018 Sohn Conference. See our full conference coverage right here
Einhorn is short Assured Guaranty Ltd. (NYSE:AGO)
David Einhorn is President of Greenlight Capital, Inc., which he co-founded in January 1996. Greenlight Capital is a value-oriented investment advisor whose goal is to achieve high absolute rates of return while minimizing the risk of capital loss.
The following is our rough coverage of the 2021 Sohn Investment Conference, which is being held virtually and features Brad Gerstner, Bill Gurley, Octahedron's Ram Parameswaran, Glenernie's Andrew Nunneley, and Lux's Josh Wolfe. Q1 2021 hedge fund letters, conferences and more Keep checking back as we will be updating this post as the conference goes Read More
Greenlight’s investment philosophy is to combine the analytical discipline of determining fair value with a practical understanding of markets. The firm believes that an investment approach that emphasizes intrinsic value will achieve consistent absolute investment returns and safeguard capital regardless of market conditions.
Prior to founding Greenlight Capital, Inc., David worked at Donaldson, Lufkin & Jenrette (DLJ) as an analyst in the Investment Banking Group. After DLJ, David joined Siegler, Collery & Co., a buyout and investment management firm, as an investment analyst.
David is Chairman of the Board of Greenlight Capital Re, Ltd. (NASDAQ:GLRE) and Chairman of the Board of Green Brick Partners, Inc. (NASDAQ:GRBK). He is the author of Fooling Some of the People All of the Time: A Long Short Story, published in May 2008.
David graduated summa cum laude with distinction in all subjects from Cornell University, where he earned a B.A. from the College of Arts and Sciences.
David Einhorn's 2018 Sohn Conference Comments
Assured Guaranty Ltd. short reminds Einhorn of Allied Capital which was Einhorn's first high profile short position he is even wearing the same tie :)
To see the Allied Short presentation from 2002 see his speech here
Einhorn says that the company has 'fooled sleepy auditors & regulators’ and that the financial firm is a ‘melting ice cube paying out the drops while it still can.'
There was a lot of option activity on this company recently and it was down 2% today when the market closed over an hour ago. Now AGO is down another 2% on Einhorn short pitch.
This is not a long-time thesis - David Einhorn says the company could collapse this year. Einhorn opines tha AGO is weighed down by junk grade bonds that will only continue to deteriorate.
Now the stock is dropping more - Assured Guaranty is down around 6% in after-hours trading
He notes the company has a lot of exposure to bad debt in Puerto Rico and makes many anologies to 2002 Allied Capital short.
Some commentators say that this short sounds like a macro bet on Puerto Rico but Einhorn talks so quick unclear if that is the case or not so stay tuned for our audio and slides!
But Einhorn notes that he has gone long PR debt as a pair trade with his AGO short - interesting.
Einhorn explains that if one believes Puerto Rico bonds are worth at least 80 cents, you should go long them and sell AGO as a hedge.