Billionaire investor David Einhorn asserted in early 2025 that market valuations are among the highest in history, expressing concern over the lack of adequate risk premiums. His hedge fund achieved a 7.2% gain in 2024 and showed improvement at 5.2% in early 2025. DME Capital Management, with $1.94 billion in assets, has heavily concentrated its investments, with 42% in three stocks and a significant portion in homebuilding, coal, and annuities. Despite warnings about stock valuations, the portfolio remains uncorrelated with the broader market index.
'The market is about the most expensive that it's ever been in the history of the time that I have been managing the fund,' Einhorn warns. With risk premiums at 'roughly zero versus government bonds,' equity investors are not being compensated for their exposure.
DME Capital Management's investment in homebuilding has matured and grown over more than a decade and it shows.
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