Navigating the Impact of AI on Business Valuation

My guest today is David Einhorn. David is the President of Greenlight Capital, a long-short hedge fund that he co-founded in 1996. He is a prominent value investor with a reputation for rigorous security analysis. In 2002, he revealed a short position in Allied Capital, which was ultimately proven correct and similarly in early 2008, he told the Sohn Conference he was short Lehman Brothers. Over his near three decades managing money at Greenlight, he has delivered impressive returns but it has not been without challenge. Our conversation covers both the highs and lows, his views on the current banking issues, and how he has evolved as an investor. Please enjoy my great conversation with David Einhorn.

The Sohn Conference 2023

Listen to Founders Podcast

For the full show notes, transcript, and links to mentioned content, check out the episode page here. 

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Show Notes

(00:03:50) - (First question) - Why he is glad he started his fund in 1996 rather than today

(00:05:58) - His view of how companies’ personnel and goals have changed since the 90’s

(00:07:01) - His counter-momentum approach to markets and how he views current trends

(00:11:17) - The jelly-donut theory of monetary policy

(00:14:46) - His outlook on inflation and the Fed from a fiscal perspective

(00:16:48) - The evolution of Greenlight’s portfolio and philosophy through history

(00:20:11) - Periods in his career that stand out as the most challenging

(00:25:58) - How tech advances have influenced his core concept of figuring out worth

(00:28:17) - His three-step process to picking investment targets

(00:29:10) - The companies he has learned the most from studying

(00:30:52) - His experience with investing in Apple

(00:33:33) - How he considers the notion of quality in a business

(00:35:05) - His views on shorting, concentration, and holding periods

(00:38:37) - What he learned from a deep dive on airline businesses

(00:40:31) - His perspective on sports franchises as an asset

(00:42:12) - His new interest in poker and how he got so good at it

(00:45:22) - Applying traditional valuation styles to the modern market

(00:47:13) - Cultivating relationships with his limited partner investors and his team

(00:54:26) - His perspectives on the insurance space

(00:57:33) - The health of the economy and financial infrastructure as he understands it

(01:01:51) - How he thinks about housing and the construction industry

(01:03:54) - How AI and other high-tech are affecting his investment decisions

(01:05:28) - Other topics on his mind, from national politics to social psychology

(01:08:22) - The kindest thing anyone has ever done for him