Einhorn's Top 10 Losing Shorts: REITs and Financials

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Includes: AA, AYE, CAH, CCO, CIT, HAR, LFC
by: Market Folly

Fresh off David Einhorn's presentation at the Value Investing Congress, it's time for the quarterly investor letter from his hedge fund Greenlight Capital. In it, we learn that Greenlight has recouped all of its losses from 2008 and is up 30%, 26.2%, and 22.9% in its various funds year to date thus far.

Einhorn makes interesting note of the market rally as eleven of the fund's fifteen largest gainers were long equity positions. And, unsurprisingly, its ten top losing positions were all short equity stakes. He highlights that Greenlight's short portfolio contains 'credit-sensitive financial institutions and REITs'. Specifically citing the REITs, he says that most of Greenlight's shorts in this space have cap rates of around 6% and have dividend yields under 5%, so let the guessing game begin as to what names he is short.

Greenlight added a few new longs that we want to highlight, including: Cardinal Health (NYSE:CAH), CIT Group (NYSE:CIT) debt, and Rheinmetall AG (RHM on German exchanges). In terms of positions it sold out of, Einhorn reveals that his fund dumped the following longs: Allegheny Energy (AYE), Clear Channel (NYSE:CCO) term loan, First Data term loan, Harman International (NYSE:HAR), Oesterreichische Post.

Additionally, Greenlight also covered the following shorts: Alcoa (NYSE:AA) and China Life Insurance (NYSE:LFC). That covers the major portfolio moves for Greenlight (at least the ones it's disclosed). We have also recently covered some of its other moves, such as a short position in the ratings agencies as well as an investment in physical gold.

Embedded below is hedge fund Greenlight Capital's Q3 investor letter for this year:



Also, you can download the .pdf here.

We cover Einhorn's hedge fund extensively on the blog and have detailed its recent movements, so make sure you also check out Einhorn's presentation at the Value Investing Congress, as well as his insight from the Great Investors Best Ideas conference.