Einhorn Steamrolled: Greenlight Plunges 14% YTD Despite Tech Wreck

For much of 2017, hedge funds - most of which again underperformed both their benchmark and the broader market - complained that they were not generating alpha for one reason: there was no volatility. Well, they got their wish in spades last month when after months of record low, single-digit VIX, equity vol exploded resulting in a 3.9% slide in the S&P 500 and as 10-year yields backing up.

And so with volatility spiking, and what every commentator saying it was a "stockpicker's market" hedge funds surely had a blockbuster month, right?

Well, no, quite the opposite in fact: according to the Bloomberg Hedge Fund database, in February hedge funds posted an overall drop of 2.19%, wiping out all of January's gains, and leaving them flat for the year. Yes, somehow the month that all hedge funds were waiting for lead to widescale losses and last month ended up being the worst month for hedge funds since January 2016, when they slumped 2.57%.

Furthermore, as we noted two weeks ago, when looking at the breakdown of specific names at the top and bottom, one stood out: David Einhorn's Greenlight was down 11.86% as of Feb. 28, making it the worst performing hedge fund in the entire HSBC Universe.

We also flagged another problem: back on March 19 we noted that if the recent tech selloff accelerates, it would be a hedge fund bloodbath, because as we showed then, virtually every hedge fund is long tech names, with 4 of the 5 most widely owned names Amazon, Facebook, Google and Microsoft.

We also hinted that such a tech wreck may actually be beneficial to Einhorn, who famously has a big tech-heavy "bubble basket" and which has - until recently - crushed his performance.

Well, we were right about one thing: as of Friday, the HFRX Global Hedge Fund Index had dropped to the lowest level in 2018, down 1.2% YTD, and was back to levels last seen in October 2017.

We were, however, wrong about the ongoing tech rout helping Greenlight, because according to Bloomberg, Einhorn’s main hedge fund fell another 1.9% in March, extending its loss this year to 14%.

Superficially, this is not that bad - in fact, one can say that Greenlight beat his benchmark as it outperformed the S&P's 2.5% March drop. That will hardly enthuse Greenlight's long-suffering LPs who have been patiently waiting for Einhorn to have another home run, and which failed to happen despite last week's tech bust. In other words, David will be sending another letter to his clients explaining why this all "must be frustrating to you."

Some more details from Bloomberg:

Einhorn’s fund added to its losses despite a selloff in several technology companies at the end of March, including Amazon.com Inc. and Netflix Inc. The money manager has been shorting a group of technology stocks, including those companies, which he’s described as a “bubble basket,” though Friday’s letter didn’t list his current investment positions.

In late February, Einhorn said on a conference call  for his Greenlight Capital Re, that his hedge fund was experiencing its worst underperformance ever, as it suffered a 12% decline in the first two months of the year.

Greenlight has posted lackluster returns in recent years as markets, especially for growth stocks, have risen while the hedge fund has stuck to its value-investing strategy.

Since then, unfortunately it has gone from bad to worse for the poker afficionado who remains dead last in the YTD HSBC rankings and who will soon face strong pressure from LPs to come up with a hail mary if the "bubble basket" was indeed a dud.


Yen Cross Fri, 03/30/2018 - 20:27 Permalink

 Pussies were laying on the couch, passive investing and watching Netflix, when they should have been diversifying, and actively managing their portfolios.

  Fuck em all.

Nuclear Winter Fri, 03/30/2018 - 20:43 Permalink

David Whinehorn is a loser. He should double down his losses and go all in on crypto. He's Master of the Puniverse. Just drop trou and check that penis size with a telescope.

1936ryer Fri, 03/30/2018 - 21:14 Permalink

He is trying to fight poverty and poverty today isn't like poverty 100 years ago  -- WOW  what a fucking douche bag.  Poverty isn't so bad because they have cell phones is that it.  What a fucking asshole who thinks he is brilliant because he bet on the housing crisis and has made dick since.  This faggot can such a fat dick.

Yen Cross Sat, 03/31/2018 - 00:18 Permalink

 Einfag reads Z/H?

 Hey dipshit , ponzi hedge-fund clown.

  Ever heard of due diligence?

  Making money is hard when the Fed doesn't have your back.

 People ask me every single day to help them invest. I never, ever take a dime of their money.

  I DO point them in the right direction>>>> Be liquid.

 Tyler even mentioned the week before last, that it's safer to invest in 2year treasury notes, than the expected return on ES interest.

 I'm an individual investor, and think ETF's are way over subscribed.

 I look at the internals of individual companies.

 Who want's to short some CRE with me?

zipit Sat, 03/31/2018 - 08:52 Permalink

Eventually he will right about being short the highfliers, if he doesn't go broke waiting. But even when he is right, it will have not been worth it due to all the gains he missed out on, and losses he took, by being short the entire MOABMs. Ask me how I know.

QQQBall Sat, 03/31/2018 - 12:31 Permalink

It's what happens when funnymentals get steamrolled. Nobody got blown up in 2008 and every idiot decision was backstopped and produced massive gains. Einhorn isn't stoopid and hasn't forgotten how to invest. he should however give the blowhard Scotsman a call - he got on board the Fed bus and is again giving interviews. I'd invest with Einhorn, but not swervy Hugh.


The fooking Fed has destroyed savers, destroyed retirees and put their boot on the neck of already stressed pension funds. TARP, ZIRP, NIRP and QE are simply bank bailouts; the low interest rates help the pols claim victory and continue to borrow and spend.

The FED blew the y2K bubble, teh real estate bubble - anyone remember DiTech 125% mortgages?

This shit will continue until it can't... we need a foreign enemy to demonize and blame.

Enrabard Sat, 03/31/2018 - 14:23 Permalink

Sorry. Only hedge for this bubble is gold, silver and cryptos... ;) And don't tell me Bitcoin died - it died few times already... and is like a Jesus Savior for those who keep hodling faith in Him ;)