Rough few years for David Einhorn, a universally respected investor whose found himself out of step with what’s been working in the marketplace. He wonders why, aloud, in yet another brutally honest self-assessment that’s become a regular thing at this point…
Over the past three years, our results have been far worse than we could have imagined, and it’s been a bull market to boot. Yes, we have made some obvious mistakes – the worst of which was not assessing that SunEdison was a fraud in 2015 – but there have been others. A number of years ago one of our investors said Amazon would surpass Apple and become the most valuable company in the world. We didn’t get it then and, truthfully, we don’t really get it now. But, there is a reasonable possibility that he will be proven right.
Some have looked for reasons other than isolated mistakes. Theories include getting older, changing lifestyles, and an unwillingness to adapt to new market environments. We have been accused of being stubborn, but one person’s stubbornness is another person’s discipline. We will continue to be disciplined. Although it might be nice to have something to blame for the poor results, the truth is that we have been making every effort and leading with our best thinking.
It’s hard to be a billionaire and stay hungry. It’s not easy to adapt to new environments and to admit that some kinds of changes are permanent, nit cyclical. This is one of many reasons why we believe in asset classes, not the persistence of manager skill.
No one can be an elite player of this game forever. That expectation is unrealistic.
Tyler has the rest of the excerpts posted…