David Einhorn (Trades, Portfolio)’s investments at his reinsurance business, Greenlight Re, tumbled another 2.6% in November, placing losses at 23.4% for the year. Meanwhile, the S&P 500 rose 0.78% for the month and 1.32% for the year.
Einhorn manages the fund through his DME Advisors, and he has seen similar losses at his investment firm Greenlight Capital, where media has reported a loss of almost a third for the first 11 months of the year. The investor tends to buy stocks he believes are undervalued and waits for the price to rise. He has also shorted companies the market favors, such as Amazon and other technology giants.
The company’s largest disclosed positions almost mirror Greenlight Capital’s, with stakes in AerCap Holdings (AER, Financial), Brighthouse Financial (BHF, Financial), General Motors (GM, Financial) and gold. The Greenlight Re portfolio also has a large holding in Bayer AG (XTER:BAYN, Financial), which Greenlight Capital may have but does not report because the company is not based in the U.S.
The investor's losses continued despite a rebound from automaker GM, which announced vast layoffs that boosted its stock. Since the end of the quarter, GM rallied 13.96%, but remains down 9.21% for the year.Ă‚
For the same period, AerCap declined 7.16%, Brighthouse Financial lost 9.1% and the SPDR Gold Trust (GLD, Financial) rose 2.64%. His latest reported position, a stake in New York-based broadband and pay TV company Altice USA (ATUS, Financial), proved one bright spot, rising 8.46% since the end of September. But his biggest winner for the third quarter, insurance and annuities provider Brighthouse Financial, has already plunged 9.1%.Ă‚
The short book has contributed some of the worst damage. In a third-quarter conference call, Einhorn said that shorts in an unnamed healthcare company and tech stock were primarily responsible for sinking returns. Electric vehicle maker Tesla (TSLA, Financial), a stock he has disclosed as a short position in his portfolio, advanced 9.34% year to date.
November’s decline reversed a gain for October, one of only two positive months for the portfolio, with May seeing a gain of 2.6%. Greenlight Re had a dismal 2015, losing 20.2% in its worst year. It then eked out two positive years, returning 1.5% in 2017 and 7.2% in 2016.
Einhorn rose to prominence when he shorted Lehman Brothers before its fall in the 2008 financial crisis. His firm, founded in 1996, has returned an annualized 15.4% to investors.
See David Einhorn's portfolio here.
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