Alec Hogg: Einhorn explains why Value is coming back

Hedge fund manager David Einhorn of Greenlight Capital shot to fame in 2008 after profiting from a short position on Lehman Brothers. At a high-profile conference just weeks before the bomb exploded, he had publicly warned about the 158-year-old investment bank's imminent collapse. Einhorn made billions during the chaotic period, now referred to as the Great Financial Crisis..Read more: Jackie Cameron: Global tech titans under pressure.In recent years, those like Einhorn who follow the common-sense Value Investing approach have been on the wrong side of the US stock market's fashion stakes. Growth stocks have massively outperformed their Value alternative. Each $100 invested into the MSCI World Value index 15 years ago is worth $271 today – less than half the $575 yielded by the Growth index..___STEADY_PAYWALL___.Einhorn makes two telling points in his latest quarterly letter to Greenlight investors distributed over the weekend. First, inflation is starting to take off, which favours Value bets over Growth. And second, he reckons US market regulators are sleeping at the wheel. He accuses them of not protecting retail investors from themselves, especially in easily manipulated microstocks..Read more: Alec Hogg: Until EOH's managers believe, the market won't.The hedge fund veteran offered the example of Hometown International, whose sole asset is a delicatessen in rural New Jersey. Its largest shareholder is the next-door high school's wrestling coach. In the past two years punters have pushed Hometown's share price from $1.25 to $13. That values the company at over $100m – ridiculous for a deli whose sales average under $2 000 a month. Einhorn quips: "The pastrami must be amazing". Be warned..PS: The mind map of my notes on Einhorn's letter is republished below. Also, here's the link to this week's BizNews Digest: https://bit.ly/3tlnX7o.For your listening and viewing pleasure.Latest audio on BizNews Radio… (click on the link to access).BPH: Trillian CEOs turned whistleblowers Mothepu, GoodsonDigital currency focus – China's Yuan a first for a major economyInside Investing: In depth discussion with MAS Real Estate's CEOFlash Briefing: Eskom staff demand 15% pay rise; B4SA on vaccinesTop retail analyst 36One's Evan Walker on Shoprite's Nigeria exit.Latest on BizNews TV… (subscribe on our YouTube channel to access all our videos including live studio action of the BizNews Power Hour).Friday's BizNews Power Hour – live studio feed on Whistleblower specialFlash Briefing: NUM and NUMSA demand 15% more for Eskom staffFinance Friday. Offshore vs local – Magnus Heystek challenged

Alec Hogg: Einhorn explains why Value is coming back

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