Hedge fund legend David Einhorn warns investors are not doing their homework, predicts stubborn inflation, and says crypto is too complex for him in a new interview. Here are the 10 best quotes.
- David Einhorn reminded investors that not all unprofitable startups are the next Amazon.
- The boss of Greenlight Capital said the crypto was too complex and uncertain for him to own it.
- Einhorn blamed underinvestment in stagnant businesses for some of the current product shortages.
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Hedge fund manager David Einhorn warned that not all loss-making startups will be next Amazon, complained that too few investors scrutinize company accounts, and predicted stubborn inflation in a RealVision interview this week.
The Greenlight Capital boss also lamented the tendency for people to invest based on market sentiment rather than fundamentals, and said cryptocurrencies were too complex and uncertain for him to trade.
Here are Einhorn’s 10 best quotes from the interview, slightly edited and condensed for clarity:
1. âThe star kid of the bubble debate is Amazon. It was a company that had no real prospect of a margin, but in the end it turned out to be a very profitable thing. ‘companies that benefit from it doubt as a result. “
2. “America Online has not remained the dominant company that it was. There could be companies today that are thought to be just as dominant or potentially dominant, which in 20 years time could easily fall apart. turn out to be like America Online. “
3. âPeople have basically given up on critical accounting analysis. It’s not something that everyone is particularly interested in. Businesses that have ethics do their bookkeeping properly. And businesses that don’t. , they don’t. There’s really nothing that limits this. “
4. âThe discussion now is not necessarily even about the viability of a business. There aren’t a lot of people doing financial analysis. for dear life. ‘”
5. âCompanies can report great news and have a very, very minimal reaction to the price of a stock. It’s not that stocks are hated; there’s no one who actually listens. There isn’t. no one to buy the shares. “
6. âI’m not in the transitory inflation crowd. The private sector is allocating all the money to the fast growing software companies that are eating the world. It doesn’t allocate money to companies that make things and provide other types of services that people find less exciting, which means there are shortages of those things now. “
7. âWe’re seeing shortages in the economy because people haven’t invested. the market simply refuses to impose a reasonable cost of equity on companies that are a little more boring than software as a service companies. We are really starving them. “
8. “There’s a lot going on right now that I just put in the ‘too hard’ bucket. Crypto is too hard right now, at least for me. It’s unregulated. It’s unlimited. On the other hand, it has a real appeal. It sort of goes with the unraveling of the social norms of society. I’m not convinced that this is a huge waste or a phenomenal opportunity. “
9. “Some people think, ‘This is where we’re at right now, these are the kinds of things that you have to own, and they’re going to go up and you should own them. I have a hard time with that because I don’t really understand why these are good investments. These people did a lot better than I did because they owned things that should be owned now. “
10. “There is a chance that owning a stock always represents proportional ownership in the cash flow and profits of the business. And on that luck, I am in a good position to do just fine if it does. turns out to be the case. “
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