Friday, October 27, 2017

David Einhorn Has Some Thoughts On Investing

Mr. Einhorn last graced our pages in  June 2017's "Einhorn Compares GM to Apple and Explains Why He’s Short Tesla (TSLA; GM)" and August's "Ahead of Today's Tesla Financials We're Considering A Prop Bet: "How Big Will TSLA's Loss Be?"

From Market Folly:

Notes From Capitalize For Kids Conference 2017: Einhorn, Dreyfus & More
The 2017 Capitalize For Kids Conference recently took place and featured hedge fund managers sharing investment ideas to benefit charity to help solve challenges in children's brain and mental health.  Below are notes from some of the speakers' presentations:

Capitalize For Kids Conference Notes 2017

David Einhorn, Greenlight Capital: Presentation

-  Approaches the market from a bottoms-up perspective and is still finding cheap stocks to buy, both on a relative and absolute basis. Greenlight is always net long and is currently operating within its average exposure.

-  Despite 8+ years of underperformance by “value” investors, believes over time value investing outperforms momentum and growth investing. Believes these trends are cyclical/seasonal but does not know when this will end.

-  Has kept the same “playbook” his whole career, does not believe he has the capability to change this. Will go through market periods where people view him a smarter than he is and then also have periods where is looked at dumber than he is.

-  Look for a margin of safety within individual investments, if the thesis is wrong, would like to “break-even or the stock is dead money”, but if a little bit right or mostly right, should be rewarded.

-  If he thinks he is wrong on a position, he will exit right away, however if he is still holding on (to a mark to market loss), he will keep on fighting. If large losses are realized, he fundamentally misunderstood what was going on in the business.

-  Two big losses: SunEdison (most recently) and New Century (in 2009-10) – almost lost 100% on each...
On Wednesday Market Folly also had: