What Happened to Einhorn’s Mojo?

Einhorn

Einhorn, Has he lost his mojo?

Can anyone understand the change in performance. Is it Einhorn’s process or the market? ¬†Hint: I don’t think Einhorn went from brilliance to idiocy or was it random luck? ¬†Comments welcome.

7 responses to “What Happened to Einhorn’s Mojo?

  1. I’d be curious to superimpose a chart of his AUM alongside the performance chart.

    In reading his book “Fooling Some of the People”, I found some of his earlier picks attractive, i.e. insurance demutualizations, whereas his larger fight with Allied Capital was ultimately successful, but didn’t seem like it yielded a great rate of return given the protracted fight.

    • I think you are right. Often managers are very successful sub $150 million, then are successful and grow out of their edge.

  2. He’s too large

  3. Reversion to the mean.

    He was never that good to begin with (if you find out with what bets and with who’s input he made his killing earlier).

    Now, it’s just basic reversion to mean.

    The question is : will he learn, can he be humble enough. My ego-meter says, unlikely, but possible…

    • Thanks, for your thoughts. Analyze the REAL track record of a money manager is very difficult. I did with Mohnish Pabrai. He simply bought highly leveraged businesses both operationally and financially (his subprime bets) and he generated 30% annual returns during a MASSIVE credit boom from 2000 to 2008. People flocked and went wild giving him more money. Credit bust, then down 85% as should be expected. Now he is up again during another credit boom–but now the bubble seems to be losing air. His results fit his method.

  4. John Chew – totally agree with you on Mohnish Pabrai. His picks don’t make sense to me, and his performance of last year& this year has been terrible.

    • I think he does “outperform” the indexes over time but with huge swings. Why. He buys disliked assets and holds them. Instead of buying what is popular.

      Just know what generates your returns so it fits your strategy.

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