David Einhorn was being David Einhorn again this week, moving stocks as few hedge managers can do right now.
At the Value Investing Congress in New York, he offered four ideas and about 120 PowerPoint slides, causing quite a market stir, but his most notable words came early on in his talk, when he discussed the extent to which people should invest based on his words.
According to Barron's, he told the audience, "Apparently now I'm a verb," as he showed a slide with a story using the term "Einhorned." He continued on about how analysts who just follow his words or speculate about his intentions are "about as useful as replacement referees that decide 'touchdown Seahawks.' "
But if he was trying to talk the market out of basing decisions on his picks, he was not very successful. One of his most talked about "picks" was Chipotle.
"We think Chipotle is a short," he was quoted. "The stock has a nosebleed valuation that does not leave room for deceleration. History says that sooner or later that even the restaurants that generate the most enthusiasm event come back to earth."
In addition, "commodity prices are rising, as grains have risen and meat prices are likely to rise." Obamacare is a "big expense headwind coming," as the company has non-unionized workers and will have to insure them. Einhorn then sang, "Come to Taco Taco Taco Taco Taco Taco Taco Bell."
That was enough to tank the Chipotle stock. As for other picks, he's bullish on GM and Cigna and bearish on Green Mountain Coffee Roasters.
David Einhorn fares well in August