| NEW YORK
NEW YORK Aug 5 David Einhorn, head of hedge
fund firm Greenlight Capital, said Tuesday that he remained
cautious on the stock market and that second-quarter investments
suffered slightly from short bets against French bonds and the
In a conference call for his Cayman Islands-based reinsurer
Greenlight Capital Re Ltd, Einhorn said he remained
"cautiously positioned" and that, after trimming a number of
positions that had gained, gross long exposure in the
reinsurer's portfolio declined by 3 percent over the quarter.
"As the market continues to rise in the face of conflicting
economic data, global unrest, and looming overdue Fed exit from
quantitative easing, we remain cautiously positioned," said
Einhorn, who is chairman of Greenlight Capital Re and oversees
its investment portfolio.
Einhorn was referring to the Federal Reserve's periodic cuts
to its massive monthly bond-buying program, which it has done in
an effort to spur hiring and keep borrowing costs low. The
central bank has indicated it will end its purchases in October.
Einhorn, one of the roughly $2 trillion hedge fund
industry's most closely watched investors and whose Greenlight
Capital manages about $10 billion, is a top investor in Apple
Inc shares. Einhorn said Tuesday that Apple was still
"cheap on an absolute basis."
Einhorn also said macroeconomic bets "slightly detracted"
from the reinsurer's quarterly results and cited losses on short
bets against French sovereign debt and the yen.
"Our French sovereign bond short and our yen short cost us
more than our gold position contributed," said Einhorn, a
long-time gold bull.
Einhorn sounded the alarm on France at a Greenlight Capital
Re event in New York on May 20, where he said French government
bonds were "mispriced" relative to Italian, Spanish, and Greek
government bonds and that the country could face a "real
At that event, he said he had taken a long position in Greek
banks since he did not expect the country to default or leave
the euro zone currency bloc in the near term.
Einhorn's Greenlight Capital gained 7.9 percent net of fees
and expenses in the second quarter, bringing its net
year-to-date return to 6.4 percent, the firm said in a
second-quarter letter to investors dated July 25.
(Reporting by Sam Forgione; Editing by Jennifer Ablan and Grant