Einhorn fund down nearly 28% for first 11 months of 2018

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learner88

He was known to be among the best value investors. He was so good at shorting that a sentence from his mouth can cause XX% loss in the stock he shorted.

I am sorry to hear what happened to him this year. I wonder what can we learn from the terrible performance of the great master in 2018. Why did his risk management fail him?

https://www.reuters.com/article/us-...und-greenlight-grow-in-november-idUSKCN1O02X5

BOSTON (Reuters) - Billionaire investor David Einhorn told investors on Friday that losses at his hedge fund Greenlight Capital grew this month, leaving the fund down nearly 28 percent for the year.
 
years ago there was a book about the brokerage industry with the title where are the customers yachts. the same scenario exists for the hedge fund industry.
 
learner88 said:
He was known to be among the best value investors. He was so good at shorting that a sentence from his mouth can cause XX% loss in the stock he shorted.

I am sorry to hear what happened to him this year. I wonder what can we learn from the terrible performance of the great master in 2018. Why did his risk management fail him?

https://www.reuters.com/article/us-...und-greenlight-grow-in-november-idUSKCN1O02X5

BOSTON (Reuters) - Billionaire investor David Einhorn told investors on Friday that losses at his hedge fund Greenlight Capital grew this month, leaving the fund down nearly 28 percent for the year.
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Most hedge funds play "themes"... like "oil up" or "RE down". They don't really "trade" all that much.

When their theme disappoints, they usually hold on.. maybe average down. And if it turns out they were waaayyy off in their theme, they take big losses. Not all that uncommon, actually.

What can we traders learn from him? Likely not much.

KISS, as always... with stops.
 
Abysmal performance, how does a pro investor lag the S&P on the way up and then lose ~2.5 times as much on the way down?

Personally, my view is that 90%-95% of fund managers have no consistently repeatable edge, and any past success is a combination of general luck/survivorship bias, a big one-time score, taking on far larger risks than recognized, or all of the above.
 
Specterx said:
Abysmal performance, how does a pro investor lag the S&P on the way up and then lose ~2.5 times as much on the way down?

Personally, my view is that 90%-95% of fund managers have no consistently repeatable edge, and any past success is a combination of general luck/survivorship bias, a big one-time score, taking on far larger risks than recognized, or all of the above.
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A lot of truth in that.
 
Specterx said:
Abysmal performance, how does a pro investor lag the S&P on the way up and then lose ~2.5 times as much on the way down?

Personally, my view is that 90%-95% of fund managers have no consistently repeatable edge, and any past success is a combination of general luck/survivorship bias, a big one-time score, taking on far larger risks than recognized, or all of the above.
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That's why they trade other people's money. If they would be really good they would trade only own money (like Renaissance is doing).
Now he catches at least some fees, if he would only trade own money he would have lost 28%.
 
RedDuke said:
The talent is in raising and keeping AUM.
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That's why they throw more money in buying yatchs and hooker parties...........than hiring more analysts, researchers, programmers etc.

Some guys with big bank experiences have developed networks and they start a HF. Goal is to build AUM and get 2% yearly plus incentives, till the time fund returns look stupid and ugly. Then close the shop and count your $10-20M of fees earned.
 
toc said:
That's why they throw more money in buying yatchs and hooker parties...........than hiring more analysts, researchers, programmers etc.

Some guys with big bank experiences have developed networks and they start a HF. Goal is to build AUM and get 2% yearly plus incentives, till the time fund returns look stupid and ugly. Then close the shop and count your $10-20M of fees earned.
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Actually with a lot more than $10-20M.
 
9 billion AUM and down 28%. I am sure he will raise assets despite this next year.
Institutional allocators are very patient with pedigreed money managers.
 
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