Image source: The Motley Fool
David Einhorn’s the founder and president of Greenlight Capital – a hedge fund with an exceptional record since its inception in 1996. And I think the similarities with billionaire investor Warren Buffett are striking.
Buffett scaling back his involvement with Berkshire Hathaway leaves a void in the value investing community. But I think Einhorn’s a terrific example of someone to look up to.
The next Buffett?
There’s a lot about the way Einhorn approaches investing that reminds me of Buffett. The most obvious is a focus on the long term when it comes to investing.
In its own words, Greenlight Capital doesn’t aim to outperform the S&P 500 in every quarter or every year. Instead, it focuses on making solid investment decisions that will pay off over time.
Another key similarity is the focus on companies rather than share prices. Recently, Einhorn’s taken the view that the stock market has become less efficient in correcting mis-valued shares. As a result, he advocates looking for cases where businesses themselves can provide returns for investors. This can be through dividends or share buybacks.
In the 2007 shareholder letter, Buffett said it was his intention to bring in someone to manage Berkshire’s investment portfolio. And Einhorn was one of the names rumoured to have been considered.
It’s been speculated Einhorn wasn’t interested since he could earn more money with his own fund. But while the rumours were never confirmed, I’m not the only one who sees some key similarities.
What’s Einhorn buying?
One stock Greenlight Capital’s been buying recently is Core Natural Resources (NYSE:CNR). The company was formed at the start of 2025 by the merger of Arch Resources and CONSOL Energy.
Since then, the stock’s fallen around 33%. And while it’s been one of Greenlight’s worst-performing investments this year, Einhorn has been looking to take advantage of an opportunity.
In the most recent letter to shareholders, Greenlight identified the risks with the company. These include falling coal prices and the potential for a trade war to weigh on demand. Importantly though, Einhorn also stated why the firm has continued buying the stock. Put simply, it has the capacity to return a lot of cash to investors via dividends and share buybacks.
Greenlight might well be onto something – Core Natural Resources repurchased 3% of its outstanding shares between 20 February and 31 March. On top of this, it has authorisation to buy in another 21%.
I’m not about to buy any stock just because someone else has. But the points Einhorn makes are enough to convince me Core Natural Resources is worth a closer look.
Investors might well think that goes a long way towards limiting the overall risk. And this is the kind of approach I associate with Buffett.
An investor to keep an eye on
Since its inception just short of 30 years ago, Greenlight Capital has generated an average annual return of almost 13%, compared to 10% for the S&P 500.
Maybe the reports of Einhorn considering a job at Berkshire Hathaway years ago are just rumours. But as Buffett steps back, this is someone I think investors would be wise to pay attention to.
