DAVID EINHORN’S INVESTMENT OUTLOOK
20 October 2009 by Cullen Roche
5 Comments
The head of renowned hedge fund Green Light Capital has some interesting thoughts on the markets and strategy going forward. He is increasingly concerned about a dollar crisis and has been hoarding gold and gold related assets.
I love david einhorn, and he is really good looking too. Even though he didn’t email me back.
I think Einhorn makes a lot of very solid arguments in his speech. And I think it’s important to point out that the gold price is still not anywhere near its all-time inflation adjusted high. I think it still has a long way to go on the upside because if the Fed were to withdraw its easy money policies the economy would suffer considerably, while the easy money policies continue to pressure the dollar. Many people thought oil was done going up around $90. And then it reached a ridiculous level some 60% higher. And I recently read a very interesting article at http://www.goldalert.com titled “Gold Up, Dollar Down – Does it Really Matter” on the left side of the page that does a good job explaining the relationship between the gold price and the dollar given the Fed’s monetary policies, and the huge conflict of interests that Einhorn also discusses between politicians’ short-sightedness and focus on the short term versus what is in the best interests for the long term benefit of our country.
The first 2 1/2 pages were fascinating. Then it happened…”the real solution is to break up anything that fails that test.” Einhorn fails to even consider that monopolies (in his words, oligopolies) in a truly Capitalist economy are virtually impossible. I know, I know…thats so………idealistic. Just remember that anything else relies on subjectivity. That is, everyone has a different opinion about how much Government should get involved. Laissez-faire changes all the rules in favor of the individual…no special interests, lobbyists, PR firms. Its ridiculous to think that ANYONE can have ANY investment philosophy that makes ANY sense these days when, with the stroke of a pen, contract laws and rules of the game can change in an instant (See Chrysler bondholders). Oh well…Einhorn has his strategy which will likely succeed…not because of his knowledge, but because he “knows people”.
Bravo David Einhorn, bravo. Even when wrong I liked this guy.
Short all currencies, hard assets are the only play for some time. Imho.
However, our demographics are not as bad as the dying nations of Japan, Europe and even Mexico.
Freedom still encourages breeding in America. Here’s a random stat, the average, college educated white couple in America has a larger family size on average than the entire country of Italy, all socioeconomic classes, races, etc.
Children and families are the future. When you no longer care for that, then the bell tolls for thee. Combine that with an inability to take pain, and you shall see the result.
i just read it today in its entirity.
a real gem.
i too believe that the next shock won´t come from where we expect it (US), but some other part of the world.
carefully study his thoughts on interest/currency risk in japan!