David Einhorn
Founder of Greenlight Capital — a long-short value investor famous for rigorous research, contrarian conviction, and prescient short calls on overvalued and troubled companies.
Who he is
David Einhorn founded Greenlight Capital in 1996 with about a million dollars and built it into a multibillion-dollar hedge fund through disciplined value investing on both the long and short side.
He became widely known for his public warnings about Allied Capital and, most famously, his early and correct short of Lehman Brothers ahead of the 2008 financial crisis — calls grounded in painstaking forensic analysis.
Core philosophy
Einhorn applies the same value framework in both directions: buy businesses trading below intrinsic value, and short those whose prices have detached from reality or whose accounting hides problems. His edge is depth — reading filings others skim.
He treats short selling as risk management and a test of conviction, not a side bet. The unifying principle is that price must eventually reconnect with underlying economics, and rigorous research finds where the gap is widest.
Key lessons for individual investors
- Read the footnotes — the most important facts are often buried in the filings.
- Value works in both directions: overvaluation is as real as undervaluation.
- Conviction must survive being early and being doubted for a long time.
- Risk management is the job; protecting capital comes before chasing return.
- Independent analysis beats consensus — the crowd is often wrong at extremes.
Live track record & latest portfolio
Real figures from public 13F filings and historical returns, via Greenlight Capital. For education only — not investment advice, and not a recommendation to copy any position.
Annual return history
Yearly returns (%) as reported by GuruFocus. Past performance does not predict future results.
Source: GuruFocus. Figures are delayed and may be revised.
Ask David Einhorn a question
Type a question about David Einhorn's classic investment theories, or pick one below.
The company delivered. The price still failed.
In March 2000 Cisco briefly became the most valuable company on earth at roughly $550 billion — over 100 times earnings. Run the DCF backwards and the price required Cisco to grow flawlessly for decades and become a meaningful share of the entire economy. Analysts at the time called it conservative.
Here is the cruel part: the business largely delivered. Revenue and profits are several times larger today than in 2000. The stock still fell almost 90%, and did not reclaim its 2000 high for about 21 years — because the question was never whether Cisco would grow, but whether it could grow faster than a price that had already spent the future. It could not.
Reverse the DCF before you buy: ask what growth today's price already assumes. A great company and a great investment are only the same thing at the right price.
The transcript said what the stock price would not
On Enron's April 17, 2001 earnings call, analyst Richard Grubman asked a basic question: why was Enron the only large financial firm that could not produce a balance sheet with its earnings? CEO Jeff Skilling's answer entered history — he called the analyst an "asshole" on the open line. The stock was near $60; Wall Street laughed along.
Readers of the transcript saw something else: a CEO with no answer to the simplest possible question. Those who kept following the calls heard the evasions multiply quarter after quarter. Skilling resigned in August "for personal reasons"; in December Enron filed the then-largest bankruptcy in US history. The warning had been published, word for word, ten months in advance.
Transcripts reveal what slides conceal: how management behaves when asked an unwanted question. Read the answers — and note the questions that never get one.
You don't need a scale to know a man is fat
In the brutal 1973–74 bear market, the entire Washington Post Company — the newspaper, Newsweek magazine and several TV stations — traded for around $100 million. Buffett conservatively reckoned the assets were worth at least $400 million. No precise model was needed: the gap between price and value was visible from across the street.
He invested about $10.6 million, then watched the stock fall further and did nothing but wait. Decades later the position was worth more than $1 billion, plus a stream of dividends along the way — a return of roughly one hundred times. As Buffett put it: you don't need to know a man's exact weight to know that he's fat.
The point of comparing price with value is to spot obvious gaps — not to manufacture false precision.
Related tools
Frequently asked questions
What is Greenlight Capital?
David Einhorn's hedge fund, founded in 1996, known for long-short value investing and high-profile, research-driven short calls.
Is David Einhorn a value investor?
Yes — he applies a value framework on both the long and short side, buying below intrinsic value and shorting prices detached from fundamentals.
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