Einhorn Says It's Hard to Find Investments After Market Rise

Tuesday, 05 Aug 2014 04:46 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Hedge-fund manager David Einhorn is struggling to find value amid a five-year stock market rally.

“We had a difficult time finding new investments this quarter,” he said today on a conference call discussing results at Greenlight Capital Re Ltd., the Cayman Islands-based reinsurer where he is chairman. “As the market continues to rise in the face of conflicting economic data, global unrest, and looming overdue Fed exit from quantitative easing we remain cautiously positioned.”

The Federal Reserve has begun to wind down its bond-buying program, known as quantitative easing, as the U.S. economy recovers from the financial crisis. Einhorn has said the central bank’s stimulus policies propped up asset prices and likened the approach to eating too many jelly doughnuts, a habit that can be harmful to long-term health.

The Standard & Poor’s 500 Index has almost tripled from its 2009 low, limiting options to buy stocks at attractive prices. Warren Buffett’s Berkshire Hathaway Inc. ended the second quarter with a record $55.5 billion in cash as the company moderated equity purchases and kept searching for large acquisitions. Paul Singer’s Elliott Management Corp. warned in an investor letter last month that “substantial inflation is occurring in many asset classes.”

Einhorn, best known for betting on a decline in Lehman Brothers Holdings Inc. before the bank collapsed in 2008, oversees investments for the reinsurer and runs the hedge-fund firm Greenlight Capital Inc. His strategy is to bet both on gains and drops in stocks.

Apple, Micron

Greenlight Re reduced its net-long exposure to 48 percent at the end of June. That compares with March 31 when bets on rising assets exceeded short wagers by about 52 percentage points. Einhorn, 45, trimmed some of the company’s winning investments in the second quarter.

Gains on Apple Inc. and Micron Technology Inc. helped drive an 8.1 percent gain in the reinsurer’s $1.5 billion portfolio in three months ended June 30.

July didn’t go as well. Einhorn said that the portfolio declined 2.6 percent even as Apple gained during the month.

“We had a large number of small losses throughout the rest of the portfolio that summed up to a losing month,” he said. “None of the losses were large, and the real problem was a lack of other significant winners.”

Greenlight Re sank 5.1 percent to $31.89 at 4 p.m. in New York, the biggest drop since November 2012.

© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Hedge Fund Manager Kass: Fed Won't Raise Rates Until At Least 2016

Sunday, 19 Oct 2014 22:23 PM

Until recently, most financial experts expected the Federal Reserve would begin raising interest rates around mid-2015. . . .

WSJ's Zweig: Do Your Homework Before Buying Structured Notes

Sunday, 19 Oct 2014 22:07 PM

Structured notes have come into vogue, as they always do when there's turmoil in the stock market, explains Wall Street  . . .

With Stocks, Bonds at Lofty Levels, Future Returns May Lag

Sunday, 19 Oct 2014 21:55 PM

While many investors are caught up with the recent volatility in financial markets and the 10 percent correction of the  . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved