BOSTON (TheStreet) -- David Einhorn's Greenlight Capital initiated stakes in multimedia conglomerate CBS (CBS), carmaker General Motors (GM) and semiconductor company Marvell Technology (MRVL) in the third quarter as the hedge fund bucked the stock market's sharp decline.
Despite the benchmark S&P 500 Index's 14% drop in the quarter, which was marked by violent market swings, "our conservatively managed portfolio essentially went sideways with much lower volatility," decreasing 1.2%, Einhorn said in a letter to hedge fund shareholders this week. Greenlight will report third-quarter holdings next week, which will give a fuller picture of his investments.
Besides equity investments, Einhorn, 42, struggled to work out a deal to buy his beloved New York Mets baseball team, an effort that ultimately failed.
The Greenlight hedge fund fell 6.2% from the start of the year through the end of the third quarter, versus the 7.7% decline of the S&P 500. Returns by famous hedge fund managers are all over the place this year as many countries' economies accelerated, then slowed unexpectedly. Billionaire investor John Paulson is down more than 30% this year, while James Simons' Renaissance Institutional Equities Fund is up more than 30%. According to eVestment/HFN, its HFN Hedge Fund Aggregate Index, which includes the results from just over 4,000 hedge funds, fell 3.1% in September and was down 5.6% for the year through the end of the third quarter. Greenlight said it bought CBS because it expects there will be growing demand for its programming from cable-system operators. The income that generates should amount to "several hundred million of new earnings to CBS annually." >>View Greenlight Capital's Portfolio The hedge fund said the company is also finding new ways to monetize its content library, and should benefit from increased advertising spending when the economy recovers. In addition, political advertising will ramp up from 2012's presidential election.
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