About
David Einhorn is an American hedge fund manager and value investor who gained prominence for his incisive short-selling research and contrarian investment approach. Here's who he is:
David Einhorn was born in 1968 in New Jersey and graduated summa cum laude from Cornell University with a degree in government. He founded Greenlight Capital in 1996 at age 27 with just $900,000 in capital, and built it into a multi-billion dollar hedge fund known for both long value positions and well-researched short calls. Einhorn gained widespread recognition in 2002 when he publicly questioned Allied Capital's accounting practices, a position detailed in his book "Fooling Some of the People All of the Time," and later became famous for his prescient shorting of Lehman Brothers before the 2008 financial crisis.
Einhorn is known for his rigorous fundamental analysis, forensic accounting skills, and willingness to challenge corporate management and questionable business practices publicly. Unlike pure value investors, he runs a long-short equity strategy, taking concentrated positions on both sides of the market. His investment approach combines traditional Graham-and-Dodd value principles with event-driven opportunities and a keen eye for financial irregularities. He's particularly skilled at identifying overvalued companies with accounting red flags, making his short presentations at investment conferences highly anticipated events.
Beyond fund management, Einhorn has become a influential voice on market structure, corporate governance, and financial regulation. He's testified before Congress on regulatory issues, spoken out against index investing's impact on price discovery, and criticized Federal Reserve policies. An avid poker player who has cashed in World Series of Poker events and donated his winnings to charity, Einhorn brings game theory and probabilistic thinking to his investment approach. Despite facing challenging performance in recent years as value investing fell out of favor, he has remained committed to his investment philosophy and transparent with investors about both successes and struggles.
David Einhorn's Best Quotes
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"The stock market is a no-called-strike game. You don't have to swing at everything—you can wait for your pitch."
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"We believe that the most important question to ask is: 'What's the value of this business?' not 'What's the next catalyst?'"
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"Sometimes the best investments are the ones you don't make."
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"Accounting is not about truth. It's about rules, and rules can be manipulated."
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"When managements are good, you need to trust but verify. When they're not good, you need to verify and then verify again."
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"The market can remain irrational longer than you can remain solvent, but that doesn't mean you shouldn't take the position."
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"I'd rather lose money being intellectually honest than make money being intellectually dishonest."
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"Short-selling gets a bad rap, but it's really just the other side of price discovery. Someone needs to challenge overvalued stocks."
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"Risk management is not about avoiding risk. It's about taking the right risks at the right price."
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"The Fed has created a hall of mirrors where nothing is quite as it seems, and price discovery has been broken."
Written Works
Fooling Some of the People All of the Time: A Long Short (and Now Complete) Story
This book chronicles Einhorn's multi-year battle with Allied Capital, a business development company he believed was using accounting gimmicks to inflate its value. Originally published in 2008 and updated in 2010, the book details his research process, the corporate and regulatory pushback he faced, and the eventual vindication of his thesis. It's both a primer on forensic accounting and a cautionary tale about regulatory capture and corporate governance failures. The book has become essential reading for understanding how to identify financial fraud and the challenges short-sellers face when questioning established companies.
Greenlight Capital Quarterly and Annual Letters
Einhorn's investor letters are renowned for their analytical depth, intellectual honesty, and sharp wit. These letters provide detailed explanations of Greenlight's investment positions, both long and short, along with his market observations and critiques of monetary policy. Unlike many hedge fund managers who are secretive about their positions, Einhorn often provides detailed analysis of his holdings, making these letters valuable educational resources. His letters candidly discuss both successes and failures, and in recent years have included his thoughts on why value investing has underperformed and his conviction that the cycle will eventually turn.
Short Presentation Case Studies
Einhorn has delivered numerous high-profile short presentations at investment conferences, including his famous critiques of Lehman Brothers (2008), Green Mountain Coffee Roasters (2011), Chipotle (2012), Athenahealth (2015), and most recently, bubble stocks during the 2020-2021 market. These presentations, which are typically published publicly, showcase his analytical process, attention to accounting details, and ability to identify overvaluation. His Lehman Brothers presentation, delivered months before the firm's collapse, is studied as a masterclass in analyzing financial risk and corporate balance sheet weakness.
"Private Profits and Socialized Risk" and Regulatory Testimony
Einhorn has written extensively on financial regulation, market structure, and systemic risk, including testimony before Congress and op-eds in major publications. His 2009 testimony on financial reform and his critiques of too-big-to-fail policies demonstrated his willingness to engage with policy issues beyond individual stock positions. He's also written about the unintended consequences of quantitative easing, the problems with passive investing, and how regulatory changes have impacted market efficiency and price discovery.
"Bubble Logic" Essays and Market Commentary
During the 2020-2021 market bubble, Einhorn wrote several pieces analyzing the speculative excess in markets, comparing it to previous bubbles and explaining why traditional value metrics still matter. His speech "Bubble Logic" and subsequent writings challenged the narrative that "this time is different" and provided a value investor's perspective on meme stocks, SPACs, and profitless technology companies trading at extreme valuations. These writings defend the value investing approach while acknowledging the psychological and structural factors that can allow overvaluation to persist longer than rational analysis would suggest.