Sunday, August 14, 2016

Einhorn’s Greenlight Capital’s Big Bets on Gold: 13F Filing – Q1

May 31, 2009 by · Leave a Comment 

Market Folly submits:

This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.

Next up is Greenlight Capital, a $6 billion hedge fund ran by David Einhorn that specializes in spin-offs and value investing and has seen annual returns of over 20%. Einhorn’s name has been popping up in the media a lot over the past year, as he talked about his well documented short position in Lehman Brothers. And, while that position paid off handsomely for him, it barely offset losses he experienced from other positions.

He was caught in the massive Volkswagen (VLKAY.PK) short squeeze as he detailed in one of his investor letters. Einhorn has also recently detailed the saga between his fund and Allied Capital (ALD), a company he shorted, in his book Fooling Some of the People All of the Time: A Long Short Story. It gives you an inside perspective as to how Greenlight constructs and researches their investment theses and we highly recommend it. Greenlight approaches things by identifying mispricings in the markets and going from there.

He has recently advocated getting long gold (GLD) and gold miners (GDX). And, at the same time, he has advocated shorting commercial real estate property REITs, saying that a drop in rents of 10% hurts values due to leverage and also points to the difficulty they will have trying to refinance debt coming due. We covered more of his recent thoughts and ideas from his most recent investor letter.

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