Santangel's Review

Commentary

David Einhorn’s Comments at the Greenlight Re Annual Meeting

We attended the Greenlight Re annual meeting yesterday, and below is a summary of the comments David Einhorn made. Here is a link to the slide deck that was distributed.

  • The portfolio managed by Einhorn has returned 9.6% annualized since the formation of GLRE, vs. 5.3% for the S&P 500 during the same time period
  • Average exposure has been 90% long and 53% short since inception
  • We are in a period between two crises
  • Falling oil prices are very bullish for the consumer and the economy
  • Japan is past the point of no return
  • The portfolio is now 39% net long and “fairly fully invested”
  • Einhorn added to exposure during the May sell-off
  • GM is fundamentally misunderstood and “is a very cheap stock”
  • Owns puts on the Yen
  • Still holds gold
  • Has protection against higher interest rates
  • He is using various means to protect the portfolio from trouble in Europe
  • Said it is nearly impossible to figure out when and how the European crisis will be resolved. The further it goes the more the number of bad scenarios builds
  • There is some variance with the Greenlight hedge fund portfolio and the portfolio run for GLRE
  • The housing market is improving and it is broad based. However homes far outside the cities are not recovering
  • We are well past the bottom in terms of construction
  • Despite the macro talk, macro calls are relatively immaterial to what they do. He invests bottoms up and looks for individual securities that are misunderstood.