David Einhorn Replaces Credit Swaps With Shorts In Sovereign Debt

David Einhorn, founder and president of Greenlight Capital, one of the most successful long/short equity hedge fund managers of the past decade, replaces his credit default swaps in European sovereign debt with short sales. By doing that, Einhorn can prevent counterparty risks and avoid devastating those European banks that provides the insurance, according to Bloomberg.

GREENLIGHT CAPITAL David Einhorn

Greenlight Capital exited about half of its $667 million of sovereign debt during the third quarter, and entered into short sales on non-U.S. sovereign bond.

“There are at least three or four fairly large funds that have done exactly the same thing as David Einhorn,” said Gary Swiman, head of ICS Risk Advisors. “You go from a private market that is unregulated at this time to publicly issued government sovereign debt that is transparent.”

As of December 2nd, Greece had $3.4 billion of net credit swaps on its sovereign debt, down 46 percent from $6.3 billion at January 7th.

David Einhorn grew up in Milwaukee and graduated from Cornell. He learned the hedge fund business from Gary Siegler and Peter Collery, who managed the SC Fundamental Value Fund. David Einhorn is one of the most successful long/short equity hedge fund managers of the past decade. David Einhorn’s Greenlight Capital returned 15.9% in 2010, and 21.5% since its inception in 1996. Greenlight Capital’s market beta is around 0.5, meaning if they didn’t have any stock picking skill, they would have returned about half of the market’s return.

“We try to find things that are misunderstood,” says Einhorn. “And then if we think something is misunderstood then we figure out if it’s misvalued. And if we figure out that it’s misunderstood and misvalued, then we tend to invest”.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!