Who's afraid of the stock market? Not David Einhorn, the widely
watched and frequently imitated hedge fund manager, who has
dialed up his exposure to the equity markets over the past few
The position hasn't hurt Einhorn's flagship long-short equity
fund at Greenlight Capital, which was essentially flat in
November, losing a mere 0.5 percent for the month; it is still
up 10 percent for the year.
While many managers have taken down their exposure to the
markets, Einhorn is getting more bullish. As of the end of
November, Greenlight's investment portfolio was roughly 118
percent long and 72 percent short, compared with being 100
percent long and 73 percent short at the end of October and 96
percent long and 70 percent short at the end of September. This
exposure analysis does not include gold, credit default swaps,
sovereign debt, cash, foreign currency positions, interest rate
derivatives and other macro positions.
While Greenlight's performance is worse than the S&P 500 -
which is up 12.6 percent for the year - and the
tech-driven Nasdaq Composite, which has surged 15.5 percent in
the first 11 months, it is still doing better than most of its
peers. The average hedge fund gained 4.3 percent through
October, according to industry tracker Hedge Fund Research.
At the end of November, Greenlight's largest disclosed long
positions were tech giant Apple, chemical company Arkema,
health insurance provider Cigna, car maker General Motors and
gold. Arkema, which was one of its largest positions earlier in
the year, replaced Seagate Technology in this line-up, which
had not changed during the previous two months.
Over the past few years, the 44 year-old Einhorn has emerged as
one of the most emulated hedge fund managers of his generation,
particularly after his early but ultimately prescient short
position against Lehman Brothers, which went under in 2008.
When Einhorn speaks at conferences or on TV, investors listen
closely and act impulsively on what he says.
He has received much attention for two bearish bets detailed at
the Value Investing Congress, an investing summit that
typically takes place in New York in October. Since he laid out
his reasons for shorting Green Mountain Coffee Roasters at the
2011 conference, the stock has sunk more than 55 percent. Since
he made a bearish case against Chipotle Mexican Grill at this
year's presentation, shares of the Mexican take-out chain have
fallen 12 percent.
Meanwhile, two stocks Einhorn touted as long positions at the
conference this year have been profitable. GM is up 6 percent
while Cigna is up 7 percent.
The early data come from an investment account of Greenlight
Capital Re Ltd. - a Cayman Islands-based insurance company
controlled by Einhorn - that is managed by a Greenlight Capital