Greenlight Capital Sheds 1.9% in May

The S&P was higher by more than 1.5% for the month of May, yet Greenlight managed to lose money. Einhorn had been outperforming the broader indices and was one of the few funds to escape the January collapse, through a combination of shorts (bubble basket) and his long bets on gold, M and KORS–all of which surged early on.

Since then, however, things have soured. I’m actually surprised the fund managed to contain the losses to only 1.9%.

Over the past month, some of David’s positions did very poorly.

gold was lower by 5.9%
KORS was lower by 17%
DDS was lower by 16%
CNXC was lower by 10%

And his largest position was higher by 7%, which was Apple.

If you take all of his reported positions, the median loss is just 0.87%. If we throw gold in there, perhaps we get to -1.2%. The rest must be due to his ‘Bubble Basket’. Lucky for you, I’ve actually recreated it in Exodus, basing it off some of the things he imparted to me in private emails.

His churn is a lot more than my static basket. His basket underperformed mine through mid-February, by 5%. Over the past month, my Bubble Basket is up 6%. Ergo, having a basket of 100 stocks short, up 6%, is, indelibly, a bad thing for one’s performance.