| NEW YORK
NEW YORK May 8 David Einhorn, one of the most
closely followed managers in the $2 trillion hedge fund
industry, had some blunt advice on Wednesday for his fellow
investors: Do your own homework.
Einhorn, this year's star attraction at the Sohn Investment
Conference, an annual confab where the industry's top investors
share their favorite trade ideas, wrapped up his presentation by
offering some words of warning about his public comments.
"It doesn't make sense to blindly follow me or anyone else
into a stock," said Einhorn, president and co-founder of the
$8.8 billion hedge fund Greenlight Capital. "Do your own work."
He may have been talking to the converted. Einhorn's limited
impact on Apple Inc shares after he implored the
technology giant earlier this year to better use its cashpile
has been noted by industry analysts. A cover piece in March by
Bloomberg Businessweek, "When David Einhorn Talks, Markets
Listen -- Usually," highlighted the failure of the "Einhorn
effect" to work its magic on Apple.
Einhorn is perhaps best known for his prescient call on the
demise of investment bank Lehman Brothers before the financial
crisis, a trade idea he made public at the 2008 Sohn conference,
and for his short position in Green Mountain Coffee Roasters
While the conference is one of the high points of the year
for investors, it has also been criticized as a forum that
allows money managers to move stock prices and advance their
trades. Einhorn's remarks seemed to address those concerns.
The 44-year-old manager said he did not "speak about stocks
to benefit from any price appreciations that might occur" and
reiterated that his fund invested on a medium- to long-term
He said Greenlight had not liquidated any of the 30 trading
positions he had advocated at past Sohn events "within three
months of first speaking about it publicly", and added that 90
percent of the ideas were still in the fund's portfolio.
After a year, he said the fund had increased positions in
about half of the calls and decreased positions in the other
Einhorn's plays do not always turn out well. While bullish
bets on Norwegian insurer Gjensidige and a bearish
call on U.S. Steel Corp. proved prescient, Einhorn spent a
portion of his 15 minutes at last year's conference praising
shares of Apple. The company's stock price has fallen about 16
percent since he gave that presentation.
Greenlight Capital is up 5.5 percent this year through April
30, according to a person familiar with the numbers. The S&P 500
, meanwhile, rose 12 percent over that period.
This year, Einhorn suggested a long position in oil field
services provider Oil States International Inc, saying
that it was a high-quality business that markets did not
"We didn't come up with a thesis on OIS in 15 minutes, and
the data says there's a decent chance we won't change positions"
in the near term, he said. "At Greenlight, when we find a good
idea we tend to stick with it."
Investors who may have wanted to quickly put on trades based
on Einhorn's ideas this year faced another complication: He did
not begin his presentation until 6:30 p.m., two and a half hours
after the close of the U.S. trading day.