David Einhorn - The Long and Short of Investing - [Invest Like the Best, EP.322]

My guest today is David Einhorn. David is the President of Greenlight Capital, a long-short hedge fund that he co-founded in 1996. He is a prominent value investor with a reputation for rigorous security analysis. In 2002, he revealed a short position in Allied Capital, which was ultimately proven correct and similarly in early 2008, he told the Sohn Conference he was short Lehman Brothers. Over his near three decades managing money at Greenlight, he has delivered impressive returns but it has not been without challenge. Our conversation covers both the highs and the lows, his views on the current banking issues, and how he has evolved as an investor. I’m on the planning committee for this year's Sohn conference where David will be featured with others like Stan Druckenmiller, OpenAI CEO Sam Altman, Stripe CEO Patrick Collison, and Bridgewater CIO Karen Karniol-Tambour. If you’ve enjoyed Invest Like the Best and are willing to contribute to a great cause—Memorial Sloan Kettering Cancer Center—I’d deeply appreciate you buying a ticket at the link available in the show notes and join us in May for what will be an incredible day of investing and business presentations and interviews. Now, please enjoy my great conversation with David Einhorn.

 

Buy a ticket to The Sohn Conference 2023

Listen to Founders Podcast

Founders Episode 136 - Estee Lauder

Founders Episode 288 - Ralph Lauren

 

For the full show notes, transcript, and links to mentioned content, check out the episode page here. 

 

-----

 

This episode is brought to you by Tegus. Tegus, the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

 

-----

 

Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. 

 

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

 

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @patrick_oshag | @JoinColossus

 

Show Notes

(00:03:50) - (First question) - Why he is glad he started his fund in 1996 rather than today

(00:05:58) - His view of how companies’ personnel and goals have changed since the 90’s

(00:07:01) - His counter-momentum approach to markets and how he views current trends

(00:11:17) - The jelly-donut theory of monetary policy

(00:14:46) - His outlook on inflation and the Fed from a fiscal perspective

(00:15:45) - Commodities and other assets that become relevant

(00:16:48) - The evolution of Greenlight’s portfolio and philosophy through history

(00:20:11) - Periods in his career that stand out as the most challenging

(00:25:58) - How tech advances have influenced his core concept of figuring out worth

(00:28:17) - His three-step process to picking investment targets

(00:29:10) - The companies he has learned the most from studying

(00:30:52) - His experience with investing in Apple

(00:33:33) - How he considers the notion of quality in a business

(00:35:05) - His views on shorting, concentration, and holding periods

(00:38:37) - What he learned from a deep dive on airline businesses

(00:40:31) - His perspective on sports franchises as an asset

(00:42:12) - His new interest in poker and how he got so good at it

(00:45:22) - Applying traditional valuation styles to the modern market

(00:47:13) - Cultivating relationships with his limited partner investors and his team

(00:51:06) - The joy and drive that keep him buying and selling

(00:54:26) - His perspectives on the insurance space

(00:57:33) - The health of the economy and financial infrastructure as he understands it

(01:01:51) - How he thinks about housing and the construction industry

(01:03:54) - How AI and other high-tech are affecting his investment decisions

(01:05:28) - Other topics on his mind, from national politics to social psychology

(01:08:22) - The kindest thing anyone has ever done for him