David Einhorn, founder of Greenlight Capital, has shifted his portfolio strategy to favour European equities, citing macro tailwinds and geopolitical catalysts that he believes are poised to unlock value – particularly in cyclical industrial names, according to a report by Bloomberg.
Speaking at the Sohn Canada Conference in Montreal, the veteran hedge fund manager revealed that Greenlight is now net long Europe, pointing to falling global energy prices, EU stimulus efforts, and the potential for a peace agreement in Ukraine as reasons for his optimism. In contrast, Einhorn described his outlook on US equities as neutral, arguing that valuations remain “very, very expensive” and are no longer supported by fundamentals.
“We’re seeing the potential for significant upside in European industrials,” Einhorn said, noting that many of these businesses remain cyclically depressed due to war-related disruptions and past energy shocks. A peace settlement, he argued, would trigger “a lot of rebuilding and opportunities for European companies.”
Greenlight recently disclosed a position in Solvay SA, the Belgian soda ash producer whose shares reached record highs last month. The firm is understood to be building out additional exposure across the region’s materials and infrastructure sectors.
On the US, Einhorn was less enthusiastic. “I don’t think US stocks are undervalued,” he said, adding that the unprofitable tech cohort is unlikely to ever grow into current market expectations. He also expressed skepticism around the country’s readiness for an escalating trade war with China, saying, “No one seems to be interested in empty shelves,” and warned that the US may be underestimating China’s readiness and resolve for economic conflict.
In a notable shift, Einhorn said he no longer publicly discusses his short positions – a reversal from earlier in his career when he was known for taking public, high-conviction bearish stances. “I used to think there was value in adding information to the market,” he said. “But I don’t think the market wants to hear any information anyway. So there’s just no point.”
