David Einhorn talking in New York Metropolis on April 3, 2024.
Adam Jeffery | CNBC
Hedge fund investor David Einhorn’s cautious stance all yr made his efficiency endure as he navigated what he believes is the priciest inventory market of his profession at Greenlight Capital.
Einhorn’s hedge fund returned simply 9% in 2024 by the top of the third quarter, internet of charges and bills. That compares with the S&P 500′s greater than 20% acquire throughout the identical interval.
The high-profile investor mentioned he is neither calling the market a bubble nor being outright bearish, however sky-high costs brought on him to be conservatively positioned.
“The market is not simply making all-time highs. It’s, by many measures, the costliest inventory market that we now have seen for the reason that founding of Greenlight,” Einhorn mentioned within the newest investor letter final month. Einhorn based Greenlight in 1996.
Einhorn is talking at CNBC’s Delivering Alpha Investor Summit on Wednesday in New York Metropolis. It is going to be the primary probability for traders to listen to from Einhorn postelection and whether or not his views on fairness valuations and inflation have modified with the Trump and Republican insurance policies on the way in which.
After a patrons’ strike on the finish of 2023, Einhorn got here again available in the market looking alternatives, buying medium-sized positions in names like software program agency Alight and drugmaker Viatris. Traders will likely be to listen to if he is nonetheless discovering any values.
Final month, he made a bullish case for Peloton, saying the shares are considerably undervalued.
Final third of the bull market?
These new inventory picks did not essentially create a ton of alpha, nonetheless. Greenlight was damage this yr by its low internet publicity to the market and an absence of investments within the red-hot Magnificent 7 names.
“We’re more likely to proceed to underperform a rising market, as we now have all yr, however we do not want to place ourselves to lose cash ought to the market proceed to rise,” he mentioned within the letter. “We expect Paul Tudor Jones is true when he says that managing the final third of an important bull or bear market transfer is commonly the hardest.”
S&P 500, 5 years
In the meantime, he spent most of this yr calling for a reacceleration in inflation, making gold a really giant place in his portfolio. This wager has fared comparatively nicely whilst inflation has moderated with spot gold hitting a document excessive in late October, up 27% this yr.
Einhorn, a 55-year-old Cornell grad, based Greenlight Capital almost three many years in the past and went on to supply a whopping 26% annualized return for the following decade, far outpacing the broader market and plenty of friends. He then thrived in the course of the monetary disaster, predicting the autumn of Lehman Brothers. His stellar observe document made him some of the adopted hedge fund managers on Wall Road. In recent times, he is discovered some success buying worth shares which have buyback methods in place.