Einhorn At Sohn Montreal: Public Shorting Is A Major Life Stress, Classic Value Investing No Longer Works

David Einhorn, President and co-founder of Greenlight Capital (a long/short hedge fund), spoke at the 2025 Sohn Montreal Conference in a fireside chat. The conversation was moderated by Mario Therrien, Head of Investment Funds and External Management at CDPQ.

2025 Sohn Montreal Conference - David Einhorn

Career plan

When asked about his career plan, Einhorn straight up said he had no career plan. He described himself as "not a planner". He didn't think much about college in high school or what came after college while he was there. His mindset was just to focus on the current task, do it well, and "good things or good opportunities will come". He originally wanted a PhD in economics after an internship, but got rejected everywhere because he hadn't taken enough classes. This led him to Wall Street, where he chose based on liking the interview people, a choice he later admitted showed he had "absolutely no idea". He started Greenlight in 1996.

Mario Therrien mentioned Einhorn has been a consistent voice at the Sohn conference, attending 24 or 25 different events.

Einhorn shared a joke that he says summarizes US trade policy. The joke is about a guy who comes home early, finds his wife with another man, points a gun at his own head, and when his wife laughs, he says, "What do you think is so funny? You're next".

Lessons from 1998

He talked about a really tough period for Greenlight in 1998, specifically between April and October during the Asian crisis. They had six straight down months and lost about half their investors over that time due to the poor performance. Einhorn noted that investors don't like bad performance and will fire you if you have it, which he thinks is fine because investing in the fund is a voluntary choice. He even felt like firing himself during that difficult time, so he wasn't upset when others did. They were struggling and didn't have great answers for why; the things that had worked for a long time just stopped. He hopes they've adjusted since, noting performance has been "much much better again" for the last 5 years and hoping they're on a better path.

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Regarding the current market, Einhorn doesn't know if we're in a bubble, but thinks it's a very expensive disconnected market in the US. It's disconnected from cash flows and traditional views. He mentioned seeing people value stocks at 17 times their 2029 expected cash flows after multiple doublings. This disconnect comes from the change in market structure over the last 20 years. The old way, where long-only active managers buying undervalued stocks drove convergence, stopped working. This is because those investors lost assets to index funds, algorithms, retail investors (focused on memes, not value), and short-term market neutral shops. None of these participants are focused on converging undervalued stocks towards fair value. The market "structurally broken," or politely, moving towards more inefficiency, Einhorn believes.