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David Einhorn: The market tells us we are wrong, wrong, wrong



hedge fund managers

David unicorn

told clients on Tuesday that its funds declined again in the second quarter, attributing to the company's recent struggles for greater market forces that hurt investors who avoid expensive stocks.

In a letter to customers, the billionaire that operates Greenlight Capital Inc. said its funds have fallen 18.3% this year, to June, after a loss of 5.3% in the second quarter.

"In the last three years, our results have been much worse than we could imagine, and it was a bull market to boot." Mr Einhorn wrote. "Right now, the market tells us we're wrong, wrong, wrong on almost everything."

In recent weeks, some current and former customers have attributed Greenlight's difficulties to his unconventional ways ̵

1; to stick to cheap 'value' stocks, and keep customers away – which he does not has changed.

In his letter, Mr. Einhorn said that "aging, changing lifestyles and unwillingness to adapt to new market environments" would not explain Greenlight issues

"We were accused of being stubborn, but the stubbornness of a person is the discipline of another person, "wrote Einhorn.

He pointed to a market environment that hit value investors hard The strategy has strangled over a year, but said it would eventually change.

"We just can not say when," he wrote. "From today on, we think this portfolio makes a lot of sense," he said.

Mr. Einhorn said his company has made a number of "obvious" mistakes in recent years, such as SunEdison Inc., which filed for bankruptcy in 2016.

The losses could have been worse, he said. Between January and April, Greenlight ended his bearish short position

Netflix

which later increased further.

He said that he passed on the purchase

Amazon.com Inc
.

"We did not understand it then and to be honest, we do not really get it now," wrote Mr. Einhorn.

Please contact Gregory Zuckerman at gregory.zuckerman@wsj.com and Rachael Levy at rachael.levy@wsj.com


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