market folly

David Einhorn of $7 billion hedge fund firm Greenlight Capital was a guest host on CNBC's Squawk Box yesterday morning and provided us with updates on his long positions, short positions, macro views, and more. Einhorn has also been out promoting the new paperback version of his book, Fooling Some of the People All of the Time. It includes a foreword by Joel Greenblatt and a new epilogue with final details of the story's completion.

In his interview, Einhorn reveals that Greenlight Capital recently initiated a position in Sprint Nextel (S). The company has had a tumultuous past and he thinks it is poised for a turnaround, citing improved churn, reputation, handset offerings, and customer service. He also makes it a point to highlight Sprint's vast spectrum as he thinks Sprint can gain market share from such a vast network. Other than that though, Einhorn has found slim pickings in the market as he says things have been "pretty slow."

In terms of his other positions, Einhorn brings up his stake in CareFusion (CFN) that he's owned for a while as it spun-off from Cardinal Health (CAH). He sees CFN experiencing margin expansion in the future and as a play on growth in market share in the company's segment of medical devices. We penned an in-depth research report on CareFusion in our new issue of Hedge Fund Wisdom for those interested.

Einhorn has returned north of 21% annualized (net) and still likes his position in Apple (AAPL) but acknowledges that the company is by no means in the early stages of its growth as the stock has done remarkably well for some time. Regarding his stake in Pfizer (PFE), the Greenlight Capital manager is curious to see what direction the new CEO takes the company in but he still likes it as an investment due to its extremely low multiple.

Lastly, he reiterates that gold (physical, not the ETF) is his fund's largest position but still has yet to disclose just how much of the precious metal he owns. Much of what Einhorn revealed on CNBC, he largely already spoke about in his recent interview with Consuelo Mack which we also detailed.

However, the hedge fund manager did provide us with a few new tidbits yesterday. Turning to Greenlight Capital's latest exposure levels, Einhorn notes that he is typically pretty fully invested and doesn't necessarily hold a lot of cash on hand. At the present, he's about 30-35% net long which is just slightly below the long/short equity hedge fund historical averages of 35-40%.

Here's the video of Einhorn's interview and email readers will need to come to the site to view it:



Part 2 of Einhorn's interview follows with his thoughts on macro issues:



Part 3 details the Greenlight Capital manager's ability to spot red flags such as Lehman Brothers in November 2007 which he correctly identified, shorted, and profited from:



That wraps up another rare David Einhorn television interview. For an in-depth look at the rest of Einhorn's US equity longs, head to our newsletter. We've also posted up a plethora of resources related to Greenlight Capital detailed below:

- The short case on St. Joe (JOE)
- Einhorn's thesis on Vodafone (VOD)
- Greenlight's Q3 letter to investors