What's In Einhorn's Bubble Basket?

http://ift.tt/1ii03T8 By Dr. Hugh Akston:

Greenlight Capital’s Q1 2014 investor letter proved to be an interesting read and we were particularly drawn to the comments regarding high-flying momentum stocks. Greenlight has a decidedly bearish view on the valuation levels of today’s market darlings. In the letter, Greenlight discloses that it has established a short position in “a basket of bubble stocks”. Coincidentally, our Fund also has a similar strategy in place which has recently started to pay off.

Greenlight notes, “there is a huge gap between the bubble price and the point where disciplined growth investors (let alone value investors) become interested buyers. When the last internet bubble popped, Cisco (the best of the best bubble stocks) fell 89%, Amazon fell 93%, and the lower quality stocks fell even more.”

Unlike one Seeking Alpha member, we don’t have the inside track on Greenlight’s actual positions so we can only speculate but we suspect all

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