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Should You Trust David Einhorn? (Update1)

Einhorn's coyness and his increasingly public stature raise big questions, especially as the successful short seller of Lehman Brothers wages his most public activist campaign in a suit against Apple over its 2013 shareholder proxy.

Meanwhile, as pressure against ratings agencies heats up in the wake of a Department of Justice lawsuit against McGraw-Hill-owned Standard & Poor's, Einhorn may be poised to battle investors as notable as Warren Buffett of Berkshire Hathaway (BRK.A), who remains Moody's largest shareholder, according to Securities and Exchange Commission filings and comments made to CNBC.

"We believe the recent case against S&P is a negative for the rating agencies and Moody's is not immune," Einhorn said, disclosing that the hedge fund is now also short S&P's parent company McGraw-Hill.

Jana Partners, an activist fund that has waged a successful campaign to unlock value at McGraw-Hill, remains a large investor, according to a February SEC filing.

But it might be time for investors to wonder what else Einhorn is keeping from the public?

For instance, after presenting a short trade against Martin Marietta in May 2012, Einhorn made little mention of the position despite a near 40% run-up in the company's stock.

Could Martin Marietta actually be a big Greenlight money loser of 2012? It's unclear, given the company's stock performance and Einhorn's characterization of the 2012 performance of short trades.

Einhorn's wording -- or lack thereof -- leaves a lot to speculation.

If the often right-minded short seller is going to successfully use a bully pulpit to press opinions such as the prospect of a $4 to $6 a share perpetual preferred dividend paid by Apple and short trades in the likes of Chipotle Mexican Grill, Green Mountain and Martin Marietta, he might want to consider being more forthcoming about the performance of those positions and opinions.

Given Einhorn's seemingly growing communications with the investing public, it comes as a bit of a surprise that a short bet against Moody's was Greenlight's worst short position in 2012.

Such opacity undermines the hedge funder's credibility just as he tries to press a case against Apple's management to the investing public.

To Einhorn's credit, he spent the first part of his October presentation at the Value Investing Congress urging investors to seek their own analysis on long and short stock stock investments. Still, a public Apple campaign undercuts a hesitation to pitch the ordinary investor.

In the fourth quarter, Einhorn's Greenlight Capital portfolio fell 4.9%, putting returns for 2012 to 7.9%, underperforming the S&P 500.

Notably, stocks in Greenlight's short portfolio rose roughly 10% in the fourth quarter, significantly outperforming index gains and hitting the fund's overall performance.

Jonathan Gasthalter, a media spokesperson for Greenlight Capital at public-relations firm Sard Verbinnen, declined to comment beyond the hedge fund's positions public filings.

-- Written by Antoine Gara in New York

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