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Worth Interviews Hedge Fund Guru David Einhorn

Date: Thursday, September 25, 2008
Author: Marketwatch.com

NEW YORK, Sept 25, 2008 /PRNewswire via COMTEX/ -- The outspoken investor and head of Greenlight Capital talks to Worth magazine about his battle with Allied Capital, his decision to short Lehman Brothers, his opinion of the Securities and Exchange Commission, and why it's wrong to blame short sellers for the failure of bad companies.
In the debate about the underlying causes of the current financial crisis, many commentators and some regulatory officials have blamed short sellers for driving down the price of financial stocks.
In the case of Lehman Brothers, one of those short sellers is David Einhorn, the head of hedge fund Greenlight Capital. Last May Einhorn stated publicly that Greenlight was shorting Lehman stock, saying that he hoped federal officials "will pay heed to the risks to the financial system that Lehman is creating ... before federal taxpayer assistance is required."
After recent events, Einhorn has declined press requests to speak about Lehman. But in the interview with Worth, he speaks about Lehman Brothers and other issues pertaining to the current meltdown on Wall Street.
Some highlights of Worth's interview with David Einhorn:
On the case for short-selling:
I do think that there is a social value in identifying companies that are doing bad things and betting against them. I've seen the demise of a fair number of these companies, and it's not because we've bet against them, it's because these were flawed companies. And our country, our markets, our economy are better when companies that are flawed or cheating are replaced by better ones.
On why hedge funds are more reliable than investment banks:
Hedge funds appreciate that if they do a bad job, if they blow themselves up, there's nobody there who's going to bail them out. They're going to lose their business, they're going to lose their reputation, their customers are going to lose their money, and it's just going to be a sorry experience for everybody.
But if a big investment bank, like Lehman Brothers, makes a big mistake with their accounting because they didn't have adequate systems, they believe that the Treasury or the Fed will bail them out.
On the Securities and Exchange Commission:
They've done a poor job of enforcing the rules to protect investors. They protect issuers at the expense of investors, and a lot of investors are suffering the consequences. Investors need accurate information. They need there to be consequences when companies go too far out of bounds.
The full interview with David Einhorn will be published in the October/November issue of Worth magazine, but excerpts of the interview are currently available on the magazine's homepage, at Worth.com.
For more information, contact Worth editor in chief Richard Bradley at 646.805.0203 or rbradley@worth.com.
About Worth
Worth provides thought-provoking information for the growing market of individuals whose net worth exceeds $2 million. From unique stories about dynamic wealth creators to the ingenious ways they amass and distribute their wealth, Worth remains an invaluable resource for this select audience. Each issue contains insightful articles covering topics ranging from alternative investment strategies and wealth preservation tactics to the most meaningful philanthropic giving and in-depth profiles on the world's most successful entrepreneurs, wealth advisors, and business people. According to MMR, Worth subscribers have an average net worth of $4.37 million and an average household income of $630K with 58% owning secondary real estate valued at $1.9 million.
About Sandow Media
Founded by Adam I. Sandow in 2002, Sandow Media is a leader in developing multi-channel, vertically integrated luxury brands. The Company's foundation is built on identifying markets, creating indispensable resources and building influential consumer publications and online properties. Sandow Media's flagships include the powerhouse beauty brand NewBeauty magazine, which encompasses print, online and retail operations, and LUXE, the nation's largest network of luxury home magazines. In February 2008, Sandow Media acquired Worth magazine, a high-end wealth management and lifestyle magazine. With offices in New York, Florida and Texas and 175 employees across the United States, Sandow Media produces over 60 publications annually and generates over a half million unique visitors per month to the company's online properties.
SOURCE Sandow Media