Don't get me wrong, David Einhorn has made a lot of money (so I've heard), however, that doesn't mean he's that smart, nor does it mean his tactics are very ethical. The mafia makes money and so do drug dealers, but that doesn't mean their business practices are something beneficial for society.
Do we really need Einhorn's activities? I don't know, but all I can tell you is that he has a long history of conducting speculative attacks against healthy firms. He shorts companies then works with his buddies in the media to disseminate negative stories so that these stocks fall. I don't see how that brings anything of value to society. It may bring a lot of value to Einhorn, but not to the rest of us.
I'll leave this discussion for another time, but if you are interested you can read this article; it shines a little light on the way Einhorn operates.
Einhorn was at the Ira Sohn Conference in New York today. That's where a bunch of big investors get together and talk about what they like and don't like in front of a live audience. Here are a few of the things he mentioned:
Einhorn says, "Norway is the only country in the world which can finance itself."
This is a totally idiotic comment. What does he mean, finance itself? Sure it can fund itself, it has its own currency. But that's not what Einhorn meant; he believes that Norway's fiscal surplus is the reason that it's the only country that can finance itself. In contrast, Einhorn believes the U.S. has run out money. Run out of dollars. This is an incredibly stupid comment.
Einhorn says China is misunderstood and is not an investment opportunity because it "doesn't have enough money to feed the economy."
Same, stupid, claim. What money does China not have enough of? Yuan? They don't have enough? Really David?
Einhorn said he didn't like Japan for reasons spelled out by that "brilliant" mind, Kyle Bass (the guy who's sucking major wind on his gold position) and Andy Xie reasons. The latter says Japan is going to become insolvent and the yen is going to crash.
The Three Stooges.
By the way, Einhorn did say he loves Apple (shocking!) and is long nearly $1 bln worth of the stock.
Apple's probably a major short!
7 comments:
As a New York Mets fan, I'm glad this guy pulled out from becoming minority (and potentially future majority) owner of the club last fall. And I say that knowing the current owners' long standing collusion with Bernie Madoff! Can someone that's rich, competent, and not a finance gangster please buy my team?
david's favorite stock of 2011: -40% over 2011
http://www.insidermonkey.com/blog/david-einhorns-favorite-long-pick-of-2011-1747/
http://uk.finance.yahoo.com/echarts?s=98D.SG#symbol=98d.sg;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
anyone who has read his presentations will know that he is 60% hype and 40% research-based analysis(ref: GMCR). in this day and age of upside-down causalities, you usually hear the thunder before the lightning hits - in other words, most of his trades are self-fulfilling prophecies. he slags off GMCR, share price drops, funds short, price drops further, he comes up smelling like roses.
outside of this paradigm, his so-called market/company/value analysis is quite pedestrian.
I'm starting to become more and more bullish on Japan as all this parade of idiots keep going...
Also, LOL Apple, really? How original.
Leverage:
It appears that the only "real" money he's ever made is when he has been successful at maliciously destroying decent firms using lies and his web of media contacts. However, on the few stock or general market "calls" he has made, he's been a total loser. Less than stellar to be sure.
I'm with you on Japan.
Thanks for posting this about Einhorn. I hear a lot about the man on CNBC and most of it is adulation. This exposes the real person.
http://www.cnbc.com/id/47456695
Thanks, SR.
"Japan is in a “sweet spot”, supported by a recovery in private consumption, robust government spending and strong exports, adding this is likely to continue.....
The latest data showed that a major driver of Japan's expansion was public investment, which grew 5.4 percent after having contracted in the previous two quarters."
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