Hedge fund investor David Einhorn has had a challenging year as he navigated what he considers to be the most expensive stock market of his career at Greenlight Capital. Despite his cautious stance, Einhorn’s hedge fund only returned 9% in 2024 through the end of the third quarter, compared to the S&P 500’s more than 20% gain during the same period.
In a recent investor letter, Einhorn expressed his concerns about the sky-high prices in the market, stating that it is the most expensive stock market they have seen since the founding of Greenlight in 1996. While he is not calling the market a bubble, Einhorn’s conservative positioning has impacted the fund’s performance.
Einhorn will be speaking at CNBC’s Delivering Alpha Investor Summit in New York City, where investors will have the opportunity to hear his views on equity valuations and inflation in light of the recent election and Republican policies. Despite a slow start at the end of 2023, Einhorn has been actively seeking opportunities in the market, acquiring positions in companies like Alight and Viatris. He has also made a bullish case for Peloton, highlighting the stock’s undervaluation.
However, Greenlight Capital’s low net exposure to the market and lack of investments in popular stocks have hindered its performance this year. Einhorn acknowledged that managing the last third of a great bull market can be challenging, and he remains cautious in his approach to avoid losses in a rising market.
On the inflation front, Einhorn has been betting on gold, which has proven to be a successful move as the precious metal reached a record high in late October, up 27% for the year. Despite the current challenges, Einhorn has a strong track record, having produced a 26% annualized return for a decade after founding Greenlight Capital. He is known for his successful predictions during the financial crisis, making him one of the most respected hedge fund managers on Wall Street.
In recent years, Einhorn has focused on purchasing value stocks with buyback strategies in place, a strategy that has yielded some success for Greenlight Capital. As he continues to navigate the volatile market environment, investors will be keen to hear Einhorn’s insights at the upcoming investor summit.
