I last wrote about Greenlight Capital fund manger David Einhorn in August, highlighting the asymmetric beauty of his bet on the twitter deal closing. That bet has paid off with shares of TWTR rallying near the closing price.
The fund returned 4.0% in Q3 and is up 17.7% year-to-date.
Another shrewed bet made by Einhorn was a short in Eurodollar futures in a prediction of more Fed rate hikes. That was profitable in Q3 and has continued to appreciate since.
We continue to be positioned bearish as we believe that we are in a bear market,” he wrote in his letter which was obtained by Valuewalk. “Our strategy is to remain positioned bearish and to gradually stockpile dry powder, enabling us to make new investments as opportunities present themselves.”
Like his twitter investment, he puts his overall stance in simple terms.
“Whether we are in a recession or not, it’s clear that the Fed wants to deflate the stock market,” he writes. “As long as official policy is to make the stock market go down, so that people are less wealthy, so that they buy fewer things, so that prices stop going up, all while doing nothing about fiscal policy, we believe the correct posture is to be bearish on stocks and bullish on inflation.”
Read the full letter here.