David Einhorn: The Market Doesn't Make Sense

David Einhorn, who called Lehman Brothers' multi-billion dollar bluff in 2008, has released his quarterly newsletter. His work is usually interesting and provocative; this newsletter is no exception. The link to his comments is via the financial blog Zero Hedge.

One troubling market sign, as Einhorn points out, is its illogical interpretation of bad news as a reason to buy more and more, at higher and higher prices. This produces a sense of good news in the midst of plenty of reasons to question the seeming optimism.

Many market directions in the past year or so have confounded many wise Wall Street heads. Very few market moves makes sense, unless one works for a high frequency trader. It's a puzzling time, even for the so-called "smart money."

The photograph shows Einhorn at a poker event. He is an excellent player, and has reached at high at 18th place in a World Series of Poker contest.