market folly

We're posting up notes from the Ira Sohn Conference.  Greenlight Capital's David Einhorn gave a presentation on a ton of different stocks.

He screamed through 100 slides and provided very little detail, more of a way to touch on several ideas, so people can do their own work.


Short Martin Marietta Materials (MLM): priced at 35 p/e. One time fiscal stimulus has goosed earnings. Multiple too high.

Short France: exposure to Italy and Spain. Default or return to Franc not out of the question. Spain, retailers.


On China: "Big trouble in little China" Big knowledge gap, and cultural gap. Shows all the RTO frauds, no specific names to short. Overbuilding outside of main cities in China, projects don't pay off the debt service. Now USD not coming in anymore, so the gig is up. Banks are in trouble. Chinese elites are taking money out of the country.

On Japan: bad demographics. Sales of adult diapers outsold those for babies this year. Shorting the yen.  Long DeNA, Gree: Japan's two largest social network companies are in the cellar. Games under regulatory scrutiny. Better than FB.

Long Apple (AAPL): Hedge funds actually have less than 2% of assets. Says Trillion Dollar market caps aren't prohibited. Other bear case is hardware company, it's not, it's a software company. iOS platform sticky, "captured the customer" Also long Microsoft (MSFT), Marvell Technologies (MRVL).

Perpetual Preferred Stocks: Advocates use of perpetual preferred stocks. 4-6% dividend, taxed at preferential tax rates. Some special form of preferred. "Some will object that there is no precedent for this idea. That is because this is a new idea."

Thoughts on Tons of Other Stocks:  Short Zara/Inditex. Long DIA. Long Norway. Long Cairn Energy, small cap E&P. has cash in USD. Negative words on Amazon.com (AMZN): Revenue growth, no op profits; criticized company's weak profit growth... didn't say he was shorting? "Is Jeff Bezos Batman?" Impact on other retailers is clear. Hint at other shorts. Short Dicks Sporting Goods (DKS)? He says co is in big trouble with Amazon's big push into the category. Trades at 20x, could be left in the dust. Short US Steel (X). Likes Norway's GJF.



David Einhorn will also be presenting investment ideas at the Value Investing Congress in NYC in October.  Market Folly readers can receive a discount to the event by clicking here and using discount code: N12MF3


P.S. - Don't miss other presentations from John Paulson, Bill Ackman, Larry Robbins & more: notes from Ira Sohn Conference 2012.