GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Einhorn Creates His Own Fort Knox

June 10, 2011 | About:
matsandalex

matsandalex

9 followers
Several prominent investors have invested in physical gold in recent years. Most prominent is David Einhorn of Greenlight Capital.

Einhorn gained fame from shorting Lehman Brothers prior to the financial crisis. He obviously has a deep understanding of the financial system. So why is Einhorn creating his own private version of Fort Knox?

It was recently reported that Einhorn has stored his gold in trust with HSBC, which maintains a gold vault in Manhattan under its Fifth Avenue office tower. As of March 30, this dedicated gold fund had raised about $556 million from 130 investors.

A person familiar with the hedge fund industry says a secured facility in Queens is where Einhorn’s Greenlight Capital stores some of the gold bullion it has invested in. An Einhorn spokesman declined to comment on the speculation about the location of the hedge fund’s so-called physical gold.

The bigger question is what would cause Einhorn to load up on physical gold bars? He obviously has to pay a storage fee as well as insurance expenses. He obviously has doubts about gold ETFs such as GLD and even PHYS.

However, Einhorn has simply stated that "gold represents money."

“To me gold represents money. There are different types of money – some people think gold is a commodity and they like to think about jewelry demand and how much is coming out of the ground and so forth – I think of gold as money. You can have dollars, or you can have yen or euros or pounds, or you can have gold. I think the merit of gold is that given our current monetary and fiscal policy [in the US] as well as the problems in the other major currencies, gold is the money of choice that we would like to have a meaningful amount of our assets denominated in.”

Rating: 3.6/5 (13 votes)

Comments

billk
Billk - 3 years ago
i live in port st joe fl. i am in the middle of st. joe company and am highly familare with both the berkowitz and einhorn stories. both could be right depending on how whats left of joe is handled. as of now management and vision is bad. i hope they can find people that can see the forest for the trees. so the question is , who is going to buy blacks island? its the crown jewel of st. joe bay and beaches.. for more info see www.blacksisland.com

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide