Videos

David Einhorn’s Rise and Fall

Greenlight Capital’s David Einhorn is one of the most famous value investors out there, even with his aggressive investing style combining long and short. David Einhorn achieved annualized returns of 16.5% over 20 years. This makes him a great investor and will be forever. However, things are not that good lately. Greenlight capital fund is down 18.3% year to date while the S&P 500 is up!

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Greenlight Capital's David Einhorn

Greenlight Capital's David Einhorn - Strategy, Portfolio, Analysis

Transcript

Greenlight Capital's David Einhorn went from superstar to loser. This video will be about value investing long term investing performance volatility. And we'll look into his portfolio his current holdings his mistakes his strategy his future outlook and his great past performance. Could they sell investors. My name is fingerling for those who don't know me. I manage the stock markets research platform I have a small investment fund. I'm a book author. And today I want to share my views. I want to learn from David David Einhorn. He is a great investor who has beaten the S&P 500 for the first two decades of his track record but has been struggling lately and hasn't really beaten the S&P 500 since 2010. I think so. Let's look into what went wrong in the last few years. Why are investors pulling out funds. What were his wrong ideas. His short last year was short. Netflix things like that. How does he approach value investing was the core to value investing and should you be a better investor or should you follow the herd. Something else. So just the topics returns. What went wrong. Current portfolio strategy history and future things are not that good lately. His fund is down eighteen point three percent year to date from the second quarter report. So they experienced a loss of eighteen point three percent while the S&P 500 returned two point six percent. That's a terrible terrible performance. However overdue long term two decades he has really beaten the P 500 from 1996 and his annualized return was sixteen point five percent until 2016.

However since then things have changed. 2015 was very negative 20 percent down their return in 2016 was a positive eight point four percent. 2017 was just one point six percent positive and 2008 things started terribly with the loss of eighteen point three percent. So Key is lowering his annualized performance but he's still very very positive. He's still one of the best investors out there and he is still destroying the S&P 500. Over the long term however investors markets always focus on the short term and everybody is writing of David Einhorn. Should we write him off too. Or there is still so much to learn from him. Let's see what went wrong. Everything started to go wrong in 2015 when he was convinced of sun Edison but that turned out to be a fraud which eventually went bust and sharp shareholders. Einhorn being one of them lost money. Another example is Brighthouse Financial a company that is a spinoff from MetLife. If you have read the margin of safety you know that spin spinoffs are an excellent investment for value investors because there is usually a lot of value but the market needs time to adjust to spinoffs. They don't like spinoffs because then it's a new company it's not the old company anymore. And there is always great hunting territory for value investors in spinoffs. However this Bright House spin off from MetLife and Einhorn saw earnings of eight dollars per share in nine dollars per share so he was happy with the buying price of around 67. He bought in however the stock is now at 41 which didn't work really well. That's a big loss.

Buffett's investment in a spinoff and also a Claremont's investment in Synchrony Financial worked much much better and they're up 20 percent since the spinoff. Now the stock Brighthouse finished the quarter at 47 and that has been the biggest loser in 2000.