Santangel's Review

Commentary

David Einhorn: Covered Shorts and Made “Modest” Long Investments This Week

Greenlight Re had its quarterly conference call on August 10th.┬áDavid Einhorn made some comments about how he is repositioning the insurer’s investment portfolio given the “Market In Turmoil,” as CNBC is fond of calling it. He believes it is becoming increasingly clear that stimulus is not working and that inflation is leading to reduced consumption, which in turn is leading to a slowing economy. He thinks REITs are overvalued and has been shorting them. The fund also owns some sovereign CDS, options on higher interest rates, and some currency positions and other hedges. He notes that he has been making some modest long investments this week, but his long exposure is only 86% versus 87% at the end of the quarter. He clearly isn’t backing up the truck to buy.