David Einhorn on the Early Years of Greenlight Capital
David Einhorn of Greenlight Capital is one of the great successes of the hedge fund industry. But he is the first to admit, as he did in this speech, that he owes a lot of his success to his good early short-term track record. He would also be the first to admit that any given track record, over the short term, is largely a matter of luck. If Greenlight had launched in early 2008, for example, you may never have heard of him.
Imagine how many potential Einhorns never get a chance. The overweighting by allocators of short-term early track records is a major inefficiency of manager selection.