Founder & President, Greenlight Capital
David Einhorn 2026-MAY-12 Tuesday
David Einhorn 2026-MAY-12 Tuesday
• David Einhorn 2026-MAY-12 Tuesday
About David Einhorn
At the 2026 Sohn Investment Conference on May 12, David Einhorn presented five U.S. companies he described as being in transition, including Acadia Healthcare, Centene, Fluor, Versant Media, and Victoria’s Secret. He said the investments are focused on businesses where management is repositioning toward "more durable, more disciplined, and more cash generative growth." Einhorn noted that while the market appears expensive in the U.S., his firm is finding opportunities in the gap between current perception and future business quality. He also stated that he no longer holds a "bubble basket" in his portfolio, and that the stocks he discussed are not sensitive to the AI trade dynamic. In a separate interview on May 12, Einhorn expressed skepticism about the Federal Reserve's ability to lower interest rates while inflation remains near 4%, and described the U.S. fiscal situation as "non-solvable." In a December 2024 discussion with Whitney Tilson, Einhorn commented on New York City's political and tax environment, saying that politics "mostly attracts the worst people with the worst agendas" and that high taxes and quality-of-life issues are driving residents to other states.
Transcript (43 segments)
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Host0:00
All right, welcome back. Finding the best opportunities on both the long and short side of the stock market has been David Einhorn's forte for the past three decades. He's also been a fixture at Zone from its inception. The Greenlight Capital president joins us now live. It's good to have you back.
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David Einhorn0:16
It's great to be here. Thanks.
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Host0:17
Speaking of having you back, you keep coming back. And you've been here for, if not all, 31 years, certainly the majority of them. Why?
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David Einhorn0:26
Why? I missed the first five.
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Host0:27
Why is this so important to you?
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David Einhorn0:29
I've always enjoyed it. I enjoy feeling like I can pitch an idea. It forces me to organize my thoughts, figure out what I really want to talk about. I enjoy the presentation. I enjoy the cause. This home foundation has just been absolutely amazing and I feel very lucky to be invited every year.
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Host0:48
So, we just got you off stage in which we watched your presentation in which you talked about a handful of stocks. None of them are first reveals, let's say that here, but why did you choose Acadia, Centene, Floor & Decor, our parent company Verisk, which you're a new shareholder which you revealed in your prior letter, it's good to have you on board, and Victoria's Secret? Why those chosen to talk about here?
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David Einhorn1:13
It was kind of a theme within our portfolio where all five of these companies are companies that have sort of underperformed or there's a lot of problems with or thought to be problems, and there's an affirmative plan by the management teams to improve and transform them into something a bit different than what they are today. So, it's five stocks really with a similar theme.
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Host1:33
Put me inside of your psyche, I guess, when you do what you do. Is that a central theme that drives you as a stock picker? You're looking for dislocated situations, things that you feel are underappreciated and undervalued in an industry, by the way, as you've talked about in the past, in terms of value investing is all but gone away.
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David Einhorn1:55
Yes. And we're looking for misunderstood. So where we can have a difference of opinion from what we consider most other people's opinion to be.
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Host2:01
So, in your April letter to investors, you said that you were quote putting capital preservation at the top of our priorities. And you wrote the following: With so little downside priced in, we're willing to risk missing out on a possible recovery to position ourselves to play more offense should one of the downside scenarios materialize. I mean, is that you saying that you think this market's wildly overvalued?
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David Einhorn2:24
Well, I have thought the market is very highly valued for a few years honestly and certainly playing defense over the last six weeks has not been the best position and we have not really participated in the V-shaped like recovery that has happened. I think the market as a whole though when you look at on any sort of historical measure it's very very pricey and sooner or later I think we'll wind up with a better opportunity.
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Host2:50
You spent several pages, by the way, of that letter talking about the war and oil prices, the president's negotiating strategy. It was pretty clear that you thought when the war broke out and oil spiked that the stock market was going to have a much bigger decline and it hasn't. Why do you think that is?
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David Einhorn3:09
Well, actually, I thought I tried to explain in the letter why it didn't. And the reason is investors have been so conditioned over the last number of years that every decline is always met with a rapid and aggressive response by the authorities and you wind up with sort of a checkmate or V-shaped recovery. And so people are conditioned to not sell when things seem troubled. So if you sold during COVID that turned out not to be a great thing. If you sold in 2022 or 2023 those were not such great things. If you sold over the tariffs last year, that turned out not to be a great thing. And so people who were inclined to make those kinds of sales, they're mostly not managing money anymore. And so people who are remaining in the business, they're very anxious to not sell into panics or negative news. And so when the war came, the market fell much less than one would have thought if you said, gee, oil's going to do this, and this is what's going to happen geopolitically in the world. And so far, that seems to be working yet again.
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Host4:06
It seems to be the case because investors seem to be focused on the bigger picture, if you will. The fact that earnings are much stronger than people thought they would be, that the economy appears to be hanging in there and even the labor market by virtue of the most recent jobs report seems to be better than a lot of people had expected. Are you saying that are people wrong to focus away from the spike in oil, the fact that inflation is still elevated and focus on earnings which have been historically amazing?
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David Einhorn4:36
Well, some of the earnings have been more historically amazing than others. There's been a big boom in like semiconductors, right? And it's a really weird dynamic because you have like the price of a DRAM goes up a lot. So, Micron makes a lot more money. And you think for a minute, well, who bears the burden of that cost? Well, it's the people buying from Micron and that's like Meta, Apple, and people like that and those stocks aren't going down. And the reason I think is because when they're buying that DRAM at the higher price to build their AI data centers or whatever, that doesn't hit their P&L anytime soon. They amortize that cost over many years. So, you have a thing where no economics has been created. Micron makes extra money. Meta or Amazon spends more money. So, it's just a transfer from one to the other. And yet, right now, both stocks go up.
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Host5:22
So how does that work into the context of how you think about what's happened with the AI trade? I mean there was a period of time...
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David Einhorn5:28
Yeah. Well, you know, it's almost irrelevant to us. You heard the types of stocks we're involved with today in the presentation and none of them are sensitive to this kind of a dynamic.
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Host5:39
Sure. But I'm thinking about, you know, there was a time where you were writing about a bubble basket, right, within the market. And I'm thinking to myself, like Einhorn must be looking at this market right now and assembling a bubble dump truck to fill. Are you doing that?
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David Einhorn5:54
We don't really talk about our individual shorts, but I will even say the bubble basket we got out of about four or five years ago now, and I don't have a bubble basket or anything resembling that in the portfolio.
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Host6:04
Do you feel like this period of time is any way like the late '90s? How would you assess that?
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David Einhorn6:09
I actually think it's a little bit more like maybe like 2007 in the sense that you can see some underpinnings that are facing real problems. I mean, gas prices are going up. The retail data that is beginning to come down is showing softening at retail. You're seeing a mix towards people spending their money on gas and spending less money on other things. It takes a little while for the supply chain impacts of like the higher energy prices to filter through into things. And I think there are already beginning to see some signs of some real slowing that's coming. It just didn't happen the day they closed the strait. It just takes a while sort of to pass through. And I think you're beginning to see some of that.
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Host6:47
You said a while ago and maybe this sort of plays into that that you had expectations that the Fed was going to cut more dramatically than the market had expected. We feel like we're in a different dynamic.
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David Einhorn7:03
I think that's fair. I mean those comments came before the war started 100%. And so oil was at a completely different price and the inflation dynamic in the near term is completely different. So we had a high inflation reading this morning certainly on a headline basis and I think it's going to be hard for the Fed to lower interest rates while inflation is 4% or something very close to 4%. I do think that over time Kevin Warsh is going to have more of a dovish view than Powell has had and when he has the opportunity if we get a peace outcome or we get lower oil prices and stuff like that I think those kind of cuts will be yet to come.
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Host7:40
What's your take on gold?
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David Einhorn7:42
Gold has kind of had a huge run for a couple of years and I think it's kind of just taking a break from things and people are paying attention to other things. I think gold needs to kind of take its time and establish this level for a while. The longer term story for gold remains very much intact. Our fiscal situation is non-solvable. Our monetary policy is very aggressive. We're not the only ones. All of the major currencies are run essentially the same way. And ultimately you still have the de-dollarization. You have a loss potentially of the petrodollar coming out. You have elimination of the dollar as the world reserve currency as a possibility over the next few years. And I think as that happens, it's ultimately going to be good for gold.
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Host8:25
Okay. So, you still like it. Still has a place in your portfolio.
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David Einhorn8:28
It was, but I still do like it.
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Host8:30
Okay. 30 years of Greenlight, which is a hard milestone to get to in this business. Harder than I think people would realize. And you've had a lot of ups, you've had some downs, and you find yourself here. What do you think led you to 30? I mean, how did you get to 30 years, which as I said is not easy in your business given the ups, downs, the LPs that you have to answer to?
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David Einhorn8:53
It's two things. First of all, you get to 30 years one year at a time and you just pile one step in front of the next and the time kind of passes and the business builds and you get through things. The other is you have to be very resilient. It's not always going to go your way. Even when we're doing a great job, we're going to be wrong 30% of the time. Like if we get right 70% and wrong 30%, that's a great year. And a lot of years we're going to be wrong even more than that because they're not all great years. And so you're in a business where you're going to be wrong an awful lot of the time. And if that bothers you and it wipes you out, then you can't make it 30 years. You have to know that the good days are good days and the bad days are bad days and you just got to be resilient.
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Host9:33
If you had to hang one trade on the wall from those 30 years that you're most proud of, what would it be?
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David Einhorn9:39
I couldn't possibly. There's...
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Host9:40
Well, you mentioned '07. I mean, the short Lehman thing. I mean that's certainly a lot of people think about that but...
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David Einhorn9:46
Green Brick I'm very proud of. We started a business for nothing and in almost every metric it is the best home building company in the country. I have a phenomenal partner who's been the CEO of that and we've built this together into just really a wonderful business where there was nothing when we started.
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Host10:05
A book was written about your Allied trade I believe wasn't it?
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David Einhorn10:08
I wrote the book.
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Host10:09
Yeah. Oh, you wrote the book.
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David Einhorn10:10
I wrote the book.
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Host10:11
Okay. So that's got to be...
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David Einhorn10:12
Well that was certainly a memorable trade. I don't know if it was my best one. It did take six years to work.
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Host10:18
Well that's again your business is so interesting. It's the stick-to-itiveness that sometimes has to happen for you to realize what you expected from way back in the beginning. It's good to spend time with you. Thanks for being here.
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David Einhorn10:29
Thanks for having me.
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Host10:30
All right. David Einhorn with us here at the Zone conference. Coming up next, Toma Bravo's Orlando Bravo. He joins me live right here at Zone. He'll weigh in on the state of software right now and where he sees that group heading from here. We're back right after this.