According to his latest Q2 2023 Letter, David Einhorn’s Greenlight Capital funds returned 14.5% in the second quarter of 2023, net of fees and expenses, compared to an 8.7% return for the S&P 500 index. He discussed why he’s ‘worried’ about the future of the market. Here’s an excerpt from the letter:
Late in the quarter, we also added substantial portfolio protection through index hedges. If we were ‘bearish’ until March and ‘neutral’ through June, we would now characterize ourselves as ‘worried.’
When the authorities bailed out bank depositors in March, we thought the implications were bullish for both stocks and inflation, and adjusted the portfolio accordingly.
The stock bullishness played out immediately as the S&P 500 consistently moved up and to the right subsequent to the March event. The inflation bullishness has not yet materialized.
Recent inflation readings have shown a noted deceleration and the tailwind from higher rents is likely to dissipate, causing core inflation to fall further.
Even so, we believe inflation is stickier and more entrenched than the market is currently appraising.
You can read the entire letter here:
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