Investors who employ the strategy of piggybacking off of the trades of guru investors got motion sickness in the last week when the Dow Jones business wire made the gaffe that David Einhorn of Greenlight Capital bought 7 million shares of Apple (AAPL), when he actually sold 4.5 million shares, presumably to take profits, since the stock rallied 22% in the second quarter. The error and the correction both made headlines for Einhorn, but as Fortune points out, the supreme irony is that Einhorn doesn’t trade nearly as many shares of Apple as many other hedge funds.
For example, Blackrock Institutional Trust company sold twice as many shares last quarter as Greenlight did, and it owns 312 million shares of Apple, while Einhorn holds just 9 million. The question arises from this “follow the guru” technique is whether these celebrity investors move stocks because of their actual trades or on the headlines.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at firstname.lastname@example.org.
Having said that, it is worth noting new positions Greenlight Capital has initiated for the second quarter:
AerCap Holdings (AER): bought 2, 225, 000 shares at a value of $101 million and is 1.41% of Greenlight’s portfolio
NorthStar Realty Finance (NRF) 4, 539, 575 shares at $78 million and is 1.09% of the portfolio
Chemtura (CHMT) 2, 921, 928 shares at $76 million and is 1.06% of the portfolio