I’m honestly not sure why I do these updates anymore because it feels like beating a dead (or at least a “dying”) horse.
On top of that, it feels to a certain extent “wrong”, considering that if the world were any semblance of rational, it wouldn’t be happening.
And by “it”, I mean the fact that David Einhorn is suffering through a year so bad that it boggles the mind.
When last we checked in on ol’ David, he was bemoaning the abysmal year Greenlight has had in a truly sad Q2 letter that contained the following blunt assessment and admission that Einhorn “doesn’t get it”, when it comes to Amazon:
We had another difficult quarter and lost an additional (5.4)%, bringing the Greenlight Capital funds’ year-to-date loss to (18.3)%. During the quarter, the S&P 500 index returned 3.4%, bringing its year-to-date return to 2.6%.
Over the past three years, our results have been far worse than we could have imagined, and it’s been a bull market to boot. Yes, we have made some obvious mistakes – the worst of which was not assessing that SunEdison was a fraud in 2015 – but there have been others. A number of years ago one of our investors said Amazon would surpass Apple and become the most valuable company in the world. We didn’t get it then and, truthfully, we don’t really get it now. But, there is a reasonable possibility that he will be proven right.
Yes, there is indeed “a reasonable possibility that he will be proven right.”
There also seems to be a “reasonable possibility” that David is going to end up with no money to manage if this keeps up. And no, I don’t mean that literally, but I do mean that you have to wonder whether this has gone beyond the point of “poor performance” and now borders on something akin to “existential crisis”.
Investors have hit the exits amid the malaise. Greenlight hemorrhaged some $400 million in client withdrawals through midyear according to the Wall Street Journal.
Einhorn’s AUM has been cut in half since 2014 and according to a client update seen by Bloomberg, he is now down 26% for the year.
A quick look at the S&P and the HFRX Global Hedge Fund Index is all you need to appreciate how truly awful that is:
On the bright side, I guess David probably takes some comfort in the fact that Elon Musk is facing his own existential crisis.
Who knows, in the end Einhorn may have the last laugh on Tesla and if he does, these kinds of tweets from Musk are going to look pretty … errr … “tragic”-comedic in retrospect…