Yesterday I read a friendly feature article about David Einhorn in the WSJ. The article, titled “A New Face Of Hedge Funds Isn’t Shy”, runs alongside a color photo of Einhorn wearing a lucky sweatshirt while he stands among poker tables during a break at the 2006 WSOP. The authors touch upon statements that he’s made as an activist investor, some of his charitable actions, and his avant guard working style.
Einhorn has recently ruffled some feathers by criticizing regulatory organizations such as the SEC. He makes the point that regulators don’t have sufficient incentives to properly scrutinize corporations. For example, he’s quoted as saying “The SEC is run by a corporate advocate, not an investor advocate, so investors are getting a false sense of security.”
I learned a little (emphasize little) about corporate oversight when I prepared for the Series 7 and Series 63. My studies left me with the impression that regulations are largely motivated by periodic financial crises, when Congress is pushed to take legislative action by their screaming constituents. This methodology seems flawed and error-prone. We’re seeing it right now with calls to take action in this credit crisis. I’d like to learn more about the details of corporate oversight because it touches on the intersection of finance and politics.
I also liked the article’s description of Einhorn’s working style. It says that he takes afternoon naps and is usually home in time to have dinner with his family. I envy that working style because I think it engenders a healthy, relaxed style of thinking. I personally know that winning poker players bring that attitude to the table. My guess is that Einhorn’s working style has played an important role in his success on Wall Street and at the poker table.
