Einhorn Faults Unfavorable Market for Worst Month Since 2008 (1)
2015-08-04 14:12:55.79 GMT
(Updates with reinsurer’s stock drop in fourth paragraph)
By Sonali Basak and Simone Foxman
(Bloomberg) -- Hedge fund manager David Einhorn affirmed
his approach after July losses tied to Consol Energy Inc.,
SunEdison Inc. and gold fueled his worst monthly performance
since 2008.
“The overall market environment has become acutely
unfavorable for our investment strategy,” Einhorn said Tuesday
in a conference call discussing results at Greenlight Capital Re
Ltd., the reinsurer where he is chairman. “While we could have
done better in a couple spots, we don’t expect to do well when
investors shun value stocks in favor of momentum stocks.”
Einhorn said the investment portfolio dropped about 5.9
percent in July and that losses were broad-based.
Greenlight Re dropped 1.2 percent to $26.82 at 10:11 a.m.
in New York, extending the company’s decline for the year to
about 18 percent. The Cayman Islands-based company reported a
second-quarter loss after markets closed Monday.
“We’ve experienced this type of dynamic a few times
before, and in each case, the short-term results have been
painful for us,” he said. “As before, we expect that the
environment will improve, and we will recover.”
July results were also pressured by Einhorn’s bets against
a portfolio of securities that he has called the “bubble
basket.” The money manager has said the group includes
“momentum technology stocks” and didn’t identify individual
companies in the basket Tuesday.
While SunEdison was a bright spot in the second quarter,
the stock declined 22 percent last month. The initial public
offering of TerraForm Global Inc., a renewable-energy venture
formed by SunEdison, drew a “tepid reaction,” Einhorn said.
Consol and Micron Technology Inc. each plunged more than 20
percent in the second quarter. Gold also dropped in the three
months ended June 30 and extended declines since then.
“We continue to scrutinize our current positions,”
Einhorn said. “We feel our current portfolio is quite
attractive.”
For Related News and Information:
Einhorn Punished by Gold as Greenlight Re Drops 16% in 2015
Gold Bears Entrenched as Bullion Funds Lose Another $6 Billion
Einhorn Says It’s Hard to Find Investments After Market Rise
Greenlight Re vs gold: GLRE US <Equity> XAU <Equity> HS <GO>
Greenlight Re earnings matrix: GLRE US <Equity> EM <GO>
Einhorn audio-visual material: TNI AV ?1736963 <GO>
Greenlight Re income statement: GLRE US Equity FA IS<GO>
Bloomberg Intelligence P&C reinsurance dashboard: BI PCRE<GO>
--With assistance from Selina Wang in New York.
To contact the reporters on this story:
Sonali Basak in New York at +1-212-617-6310 or
sbasak7@bloomberg.net;
Simone Foxman in New York at +1-212-617-2052 or
sfoxman4@bloomberg.net
To contact the editors responsible for this story:
Dan Kraut at +1-212-617-2432 or
dkraut2@bloomberg.net;
Christian Baumgaertel at +1-617-210-4624 or
cbaumgaertel@bloomberg.net
Pierre Paulden
2015-08-04 14:12:55.79 GMT
(Updates with reinsurer’s stock drop in fourth paragraph)
By Sonali Basak and Simone Foxman
(Bloomberg) -- Hedge fund manager David Einhorn affirmed
his approach after July losses tied to Consol Energy Inc.,
SunEdison Inc. and gold fueled his worst monthly performance
since 2008.
“The overall market environment has become acutely
unfavorable for our investment strategy,” Einhorn said Tuesday
in a conference call discussing results at Greenlight Capital Re
Ltd., the reinsurer where he is chairman. “While we could have
done better in a couple spots, we don’t expect to do well when
investors shun value stocks in favor of momentum stocks.”
Einhorn said the investment portfolio dropped about 5.9
percent in July and that losses were broad-based.
Greenlight Re dropped 1.2 percent to $26.82 at 10:11 a.m.
in New York, extending the company’s decline for the year to
about 18 percent. The Cayman Islands-based company reported a
second-quarter loss after markets closed Monday.
“We’ve experienced this type of dynamic a few times
before, and in each case, the short-term results have been
painful for us,” he said. “As before, we expect that the
environment will improve, and we will recover.”
July results were also pressured by Einhorn’s bets against
a portfolio of securities that he has called the “bubble
basket.” The money manager has said the group includes
“momentum technology stocks” and didn’t identify individual
companies in the basket Tuesday.
While SunEdison was a bright spot in the second quarter,
the stock declined 22 percent last month. The initial public
offering of TerraForm Global Inc., a renewable-energy venture
formed by SunEdison, drew a “tepid reaction,” Einhorn said.
Consol and Micron Technology Inc. each plunged more than 20
percent in the second quarter. Gold also dropped in the three
months ended June 30 and extended declines since then.
“We continue to scrutinize our current positions,”
Einhorn said. “We feel our current portfolio is quite
attractive.”
For Related News and Information:
Einhorn Punished by Gold as Greenlight Re Drops 16% in 2015
Gold Bears Entrenched as Bullion Funds Lose Another $6 Billion
Einhorn Says It’s Hard to Find Investments After Market Rise
Greenlight Re vs gold: GLRE US <Equity> XAU <Equity> HS <GO>
Greenlight Re earnings matrix: GLRE US <Equity> EM <GO>
Einhorn audio-visual material: TNI AV ?1736963 <GO>
Greenlight Re income statement: GLRE US Equity FA IS<GO>
Bloomberg Intelligence P&C reinsurance dashboard: BI PCRE<GO>
--With assistance from Selina Wang in New York.
To contact the reporters on this story:
Sonali Basak in New York at +1-212-617-6310 or
sbasak7@bloomberg.net;
Simone Foxman in New York at +1-212-617-2052 or
sfoxman4@bloomberg.net
To contact the editors responsible for this story:
Dan Kraut at +1-212-617-2432 or
dkraut2@bloomberg.net;
Christian Baumgaertel at +1-617-210-4624 or
cbaumgaertel@bloomberg.net
Pierre Paulden