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David Einhorn: Trade In His Wake?

Long before the Wall Street crisis, a few agile traders spotted signs that trouble was lurking at Lehman.

In fact, Lehman CEO Dick Fuld was still making acquisitions for his contemporary art collection, when one man dared call Lehman a fake – David Einhorn.

Starting way back in the halcyon days of 2007 when Lehman was trading at record highs Einhorn, a New York based hedge fund manager, started shorting the storied institution claiming the giant brokerage was under-capitalized, with huge exposure to risky mortgage assets.

He would later take his short case public. “I think that there’s considerable reason to believe that the numbers that they’ve reported didn’t really reflect the full magnitude of the credit crisis,” he told CNBC at the time.

“I think the risk/reward in the stock is poor, from a long perspective, so we are short.”

Others on the street demonized Einhorn for his aggressive shorting tactics but months later, Lehman imploded, vindicating the battered trader.

But is this poker ace a one-trick pony? Here are his top holdings now.

Einhorn’s Top Holdings
S&P 500 Puts (SPY)
Pfizer (PFE)
URS Corp (URS)
Teradata (TDC)
Wyeth (WYE)
Cardinal Health (CAH)
Gold Miners ETF (GDX)
Allegheny Energy (AYE)
EMC Corp (EMC)
Einstein Noah (BAGL)
Source: gurufocus.com

What should you make of it?

Considering his biggest position is the S&P puts, my takeaway is that he doesn’t have such a bullish view of the overall market, explains Joe Terrnaova

Pfizer scares me in the list, adds Guy Adami but there's no denying that Einhorn is the man.


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Trader disclosure: On Sept. 3rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (BAC) And Is Short (BAC) Calls; Najarian Owns (C) Calls; Najarian Owns (CBST) Call Spread; Najarian Owns (GS) Call Spread; Najarian Owns (JPM) And Is Short (JPM) Calls; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (PALM) Calls; Najarian Owns (PDE) Calls; Najarian Owns (SEPR) Time Spread; Najarian Owns (YHOO) Calls; Terranova Owns (FCX), (AMZN), (POT), (SU), (WFT); Terranova Owns December Gold Futures; Terranova Is Short (TM)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO
Virtus Diversifier PHOLIO Owns (IGE)
Virtus Diversifier PHOLIO Owns (DBC)
Virtus Diversifier PHOLIO Owns (DBV)
Virtus Investment Partners Owns More Than 1% Of (CAL)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (SKT)
Virtus Investment Partners Owns More Than 1% Of (TNB)
Virtus Investment Partners Owns More Than 1% Of (UA)
Virtus Investment Partners Owns More Than 1% Of (CLB)

Seymour Owns (AAPL), (AA), (BAC), (UNG)
Seygem Asset Management Is Short (FXI)
Seygem Asset Management Owns (MTL)
Terranova Owns (QCOM)
Seymour Owns (VIP)


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