market folly

Fresh off David Einhorn's presentation at the Value Investing Congress, it's time for the quarterly investor letter from his hedge fund Greenlight Capital. In it, we learn that they have recouped all their losses from 2008 and they are up 30%, 26.2%, and 22.9% in their various funds year to date thus far. Einhorn makes interesting note of the market rally as eleven of their fifteen largest gainers were long equity positions. And, unsurprisingly, their ten top losing positions were all short equity stakes. He highlights that their short portfolio contains 'credit-sensitive financial institutions and REITs'. Specifically citing the REITs, he says that most of their shorts in this space have cap rates of around 6% and have dividend yields under 5%, so let the guessing game begin as to what names he is short.

Greenlight added a few new longs that we want to highlight, including: Cardinal Health (CAH), CIT Group (CIT) debt, and Rheinmetall AG (RHM on German exchanges). In terms of positions they sold out of, Einhorn reveals that they dumped the following longs: Allegheny Energy, Clear Channel term loan, First Data term loan, Harman International, Oesterreichische Post. Additionally, they also covered the following shorts: Aloca and China Life Insurance. That covers the major portfolio moves for Greenlight (at least the ones they've disclosed). We have also recently covered some of their other moves, such as their short position in the ratings agencies as well as their investment in physical gold.

Embedded below is hedge fund Greenlight Capital's Q3 investor letter for this year:



Also, you can download the .pdf here.

We cover Einhorn's hedge fund extensively on the blog and have detailed their recent movements, so make sure you also check out Einhorn's presentation at the Value Investing Congress, as well as his insight from the Great Investors Best Ideas conference.