Why trying to bet against this madness is a widow-maker trade. Logic has nothing to do with it.
Investors who’ve approached this stock market and its ludicrous valuations over the past few years from a point of view of fundamentals and ‘value’ – thus, often on the side of short-selling those stocks – have gotten clobbered, or were at least left in the dust by buy-buy-buy fundamentals-don’t-matter automatons.
This has become an exercise in frustration-management for many – including, apparently, David Einhorn, founder and president of Greenlight Capital, a $7 billion hedge fund that became successful by searching for overvalued and undervalued companies and betting one way or the other. This strategy has hit the rocks in recent years. So far this year, the fund is up 3.3% while the S&P 500 is up 14%.
In a letter to Greenlight’s clients, reported by Business Insider, he unloaded his frustrations about this crazy market.
This post was published at Wolf Street on Oct 24, 2017.
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