NEW YORK ( Insider Monkey ) -- Insider Monkey, your source for free insider trading data, interviewed Greenlight Capital's David Einhorn about his book, "Fooling Some of the People All of the Time." David Einhorn is one of the most successful long/short equity hedge fund managers of the past decade. Since we strive to imitate the best of the best and free-ride their stock picking skills, we were certainly happy we had some of his time.
Greenlight Capital returned 21.5% per year since its inception in 1996, beating the S&P 500 Total Return Index by more than 15 percentage points per year. This was a great opportunity for us to uncover David Einhorn's stock-picking secrets. We first asked about his overall strategy. "We try to find things that are misunderstood," said Einhorn. "And then if we think something is misunderstood then we figure out if it's misvalued. And if we figure out that it's misunderstood and misvalued, then we tend to invest." Then we asked him how he narrows the selection field. Seems Einhorn doesn't follow any blog or website for investment ideas. This didn't surprise us because we all tend to follow him instead. What about newspapers? "It could be newspapers but more often it's stories. It's other people discussing their investment thesis or observing what's going on, and then just thinking about things. A lot of the stories we hear, we start with, started with somebody else's idea," Einhorn said. Actually that's what we observed too. Einhorn has several common positions with certain hedge funds. Hedge fund managers share investment ideas with certain other hedge fund managers for two reasons. First, to double check their investment thesis and accuracy of their analysis. Second, to receive investment ideas in return in the future. A hedge fund doesn't have enough resources to cover thousands of companies in depth, so they rely on other proven hedge fund managers. In a sense, they monkey each other. This is what we at Insider Monkey are trying to do as well. To test the accuracy of our hypothesis, we asked Einhorn whether the Sprint Nextel ( S) investment he recently made was somebody else's. David Einhorn: "Yes, I think that was somebody else's idea."