Greenlight’s David Einhorn is known for his incredible knack for short selling, so it was awesome when he when he told Consuelo Mack that one of his tricks to finding companies to short is as simple as reading the paper.
Mack asked Einhorn if there are any warning signs that awaken his shorting instinct, warning signs that might automatically caution everyone to stay away from a particular company.
Einhorn resisted at first; he didn’t want to reduce a complex transaction to a few bullet points, but he did mention there are certain behaviours that are a red flag.
“Such as,” Mack coaxed.
Such as management not answering questions directly… [W]hen somebody gets a newspaper article written about them, and they make a lousy comment about the news publication, it’s usually a sign that there’s some other sort of problem going on.
Might this also apply to Einhorn? Because in April, the fund manager slammed the Wall Street Journal in his quarterly investor letter for its “yellow” reporting that his firm was “colluding to short on the Euro,” alongside a host of other funds.
We wish Mack had queried him on that one…