Losing Money Reduces the Risk of Too Much Money

I slave away all day writing sentences on the internet. David Einhorn, meanwhile, works full time (except for a midday nap and some poker vacations) at his job of managing a multibillion-dollar hedge fund, which may lack some of the spiritual rewards of writing sentences on the internet but which definitely pays better. So it is particularly painful for me to realize that I’ll never write a sentence as good as this throwaway line that David Einhorn put in an investor letter:

Greenlight Capital, Einhorn’s hedge fund, lost 34 percent in 2018, “coming off six straight years in which Greenlight lagged behind the total return of the S&P 500.” Client redemptions brought assets under management to about $2.5 billion, “down from more than $6 billion a year ago” and $12 billion at its peak. And after seven straight years of poor performance, and the ensuing billions of dollars of redemptions by irate clients, Einhorn took stock of the situation and decided: Hey, good news, we have solved the problem of growing too fast! That risk has been taken right off the table! And that news was so good that he had to share it with clients. And it’s good news for the clients too, because, if they haven’t taken their money out of Greenlight in disappointment after seven straight bad years, now they can put more money in. They can put more money in! What?