ahn have einhorn and ic cutting back. you've got tiger global doubling down.es an investor do? meb: we wrote a book that tackles 15 of our favorite managers. we take you through this process. it helps to have some domain expertise. to be able to know, for example, you can follow a manager that is high-frequency. you can't follow a manager that does arbitrage trades or macro trades or cpas or derivatives. you want the stock pickers. with long-term time horizons. being able to study those that don't have a lot of turnover. we think it is fairly easy to pick out some of the great ones, the buffets of the world, even einhorn, following all of those guys. they beat the market by quite a bit. emily: if you are deciding to bet on apple or not, what would you do? meb: the way you apply the theory, you are not looking at any individual stock. you are betting on the actual manager. for example, you want to say, i'm going to let warren decide. i will let him decide where he will place his bets. that is my that. i will let him go anywhere. his top 10, whatever they are, i

you see chass omen going and i'vd david einhorn cutting.oesn't say something to you when major investors start to pull out of these banks? simone: not necessarily, not after the incredible rallies we had last year. gina: energy was a clear market laggard, so naturally in december-january, you see a lot of transitions, shading transitions. the extent of the outperformance and underperformance of energy last year was the big surprise, and that might be a region why you he such -- a reason why you see such volatile trading. stephanie: people forget that fund existed's before. he was a million-dollar fund. then when subprime came, clearly his name -- you would have thought he got gold wrong here. matt: are you calling him a one-hit wonder? he did have one big hit. stephanie: a really big hit. paulson'san see john holding in the etf, the world's largest etf, and another reduction here right before it takes off. function.e hcs everyone is holding at a big holding, but it is probably better illustrated just by looking at a one-year chart of gld. t

the pressure is rising on greenlight capital's david einhorn.irm has lost $3.2 billion in assets. can he turn the fund around? y alphabet has power to pass apple. ♪ david: welcome back to bloomberg markets. david einhorn's greenlight capital under pressure after the worst underperformance ever -- only the second time in two decades that they have reported a loss. how badly it underperformed compared to the goals. 15%is goals are to generate of outflow, this difficult number to calculate. he wants to get 30% of the s&p 500. last year, that would happen 15.4%. positive. the fund is down over 20%. that does not meet his goals, to say the least. david: why haven't we seen the flight we saw out of other hedge funds? >> a lot of investors are saying i've made a lot of money with green light over the long term. he's been around for 20 years. , theyof these investors came in in the 1990's and early when they did not have this headline risk. there were not people clamoring at the doors saying we lost 20%. the average 16.5% year. they are willing to say t

david einhorn and carl icahn cutting their stakes in apple in the fourth quarterbefore the company'sstarted to slide. others see a buying opportunity. so what do these filings tell us about investor sentiment? is it a sign of trouble ahead? this person has been studying for anal -- the findings long time. use thisnvestors can information to beat the market. moves madegs show months ago. how should investors reacted to this news? when i started looking, i had the same question. i said i'm going to let the data tell me the reality. can you follow the star managers? hedge funds attracted the michael jordan's of the finance space. we did this by hand originally. we said, can we track warren buffett where each quarter we can go in, what if we equal awaited the portfolio. you could manage your way. how would that perform? out the value type managers, it works. in warren buffett's case, it has outperformed the market massively for 15 years. papers thatademic take it back to the 1970's. in general, it is a wonderful strategy. emily: take apple. it is not clear-cut. you've got people coming b

adam, what is your read on icahn and einhorn cutting back?f reflective of the tough quarter apple had. the stock price has been reflective. a few different catalysts for apple stock in terms of getting it going. there is either a strong earnings performance or new category. we just went through an earnings season where they are showing signs of slowing down. people are waiting to see what the new product will be. emily: tell us what we are expecting in terms of rollout. we have heard a potential march event, the iphone 7. >> this year seems like it will be an update to the existing product category. last year, there was a lot of attention to apple music, apple watch, apple tv. this year, you see new iphones, ipads. >> do you think we will see aggressive updating of the watch or a new version? >> we have not seen it yet, but there are expectations it will happen later in the year. it has been compared to how it is with the iphone, how the original one was a little thicker and heavier and over time, it slimmed down. emily: we will bring in tim

by david einhorn, you are getting his perceived brilliance.et: we will be back with more. ♪ alix: from bloomberg world headquarters in new york, welcome back to bloomberg markets. scarlet: let's start with the headlines on first for news. mark crumpton has those from our news desk. the rearviewwa in mirror, the presidential candidates now turn their attention new hampshire -- two new hampshire. that state will hold their primary one week from today. megan murphy joins us now from manchester. thank you for your time. last night's results in iowa, hillary clinton barely beat bernie sanders, and ted cruz with a surprise win over donald trump. how will this change the campaign over in new hampshire? have they clinton will same strategy she had before, which is as much interaction on the ground as she can. this is a very different composition in iowa. she will go to three or four different schools, she will do rallies. it is a state of rewards one-on-one interaction. for donald trump, the question is how he will come back in new hampshire. there is

einhorn with david saying he is betting against stocks of heavy equipment makers but is not singing secondhich ones. a slump in commodity prices will hurt earnings at the companies for a long time but he says low oil prices may help consumer spending in the u.s. he still believes in his bets on apple and general motors. and is recalling candy bars 55 countries. the reason, plastic was found in one of its products. the voluntary recall affects products produced early this year in the netherlands. the affected brands include mars, milky way, snickers and min. i mix. has heardher of time a presentation from citigroup, yahoo!'s thinker. -- banker. that is your bloomberg business flash. julie hyman had to check on some of the movers. julie: after the news from viacom today saying the company has gone expressions of interest in its paramount pictures unit. investors have been agitating for from the company and viacom has --ed partners to advise them they would just be selling a stake in the film unit. --amount's revenue phil 15% fell 15%. , sharesing action spiked up 6% but have paired that gain

einhorn's main fun and greenlight capital fund that fell 20% last year.inhorn -- bloombergur latest business flash. matt: drugmaker pfizer reported fourth-quarter earnings that beat in a less estimates although the company was boosted, the bottom liners boosted by a new cancer drug and thataccine, if it syrians serious currency headwinds in its 2016 forecast below expectations. how much is riding on their deal with allergen? drew armstrong joins us to go through the results. >> pfizer has been trying to return to growth after about five years. of sales going down. they have things gone off patent like lipitor. $160 million is going to take a long time to close, we have to wait until antitrust can get there and it is the thing people are waiting for. in some ways, the results of their posting matter but they don't matter as much as what the company is after this massive megamerger they will do. matt: we see the one year down 6%, today they are down even more. what is the reason to that on this company? >> the reason people want. to bet on this is a couple

if you look at some of the famous value investors out there, like david einhorn, they had rough yearsbuffett even. being a value investor is tough when the market is sort of not necessarily following the same playbook that it used to. momentum, highflying stocks are doing well, values recovering the way that they thought it would. it makes sense, the ideas behind it, it's just that sentiment can get -- betty: -- mike: and it obviously depends on your time horizon. the exxon dividend is high. there are all sorts of opportunities there. if you are a guy like ill miller , you've got to worry about those yearly, monthly, quarterly numbers and it's a tricky thing to do. betty: it is. mike, good to see you. for more fast commentary from gadfly, type it in on the bloomberg gadfly on the web. that is it for "bloomberg markets." it looks like we are going to finally close in the green for the dow and the s&p for the first time in two trading days. ♪ scarlett: we are moments away from the closing bell. steel, joealix weisenthal is on assignment. ♪ [applause] [closing bell] u.s. stocks reboundin

david einhorn's greenhorn inital slashed its stake apple. carl icahn also sold 7 million shares in apple. owns more he still than 45 million shares in the company. apple stock is down more than 8%. we will dig into the company's latest multibillion-dollar debt offering later this hour. apple is not the only technology stock getting weeded out of portfolios. druckenmiller cut the stake in facebook. the former internet darling groupon making a comeback. making wall street take notice. check out this chart as we had to break. the nasdaq biotech index seeing its biggest two-day rally since october. led by buyer jan and regeneron pharmaceuticals. ♪ itsy: at&t is phasing out u-verse tv service. it is pushing customers toward its newly acquired directv. tois giving up its plan compete directly with cable through telephone lines. it has the benefit of lower hardware programming costs. this shift is the first part of a plan to create a home getaway. within three years it will consolidate all at&t services and act as a central hub for any device. toyo

the other point on apple before we go and oh by the way, new filings show that carl icahn and dave einhornd their stakes in apple. >> do you thits a source of funds? we've seen the struggles in 2015 and probably the start of 2016. wouldn't you think some of the pressure we've seen on apple as it's gotten down into the mid 90s that some of that selling was coming from the folks looking for places to park that money that has a better beta to the upside than apple right now. >> maybe it's partly representative of an overall view of where they think the market could be going. i think icahn on the show said when we asked him before if the overall market has an issue apple could go down as well. >> sure. >> we asked the question on the show where does apple bottom? where do the sellers stop. we said an equivalent yield to the s&p which would be just under 100. actually the level is 92. that was resistance going back five years ago. it was support last august and it literally bounced off the same exact level because price has memory and that is an area where the sellers stop and where the buyers

david einhorn's reinsurance company is based in bermuda. what are some things we have seen?odity super cycle and rebound in natural gas per 2016. two years ago, he came out negative on fracking at the conference. remember, why fracking is wack, and he is still short in that space and he says the slowdown in china has hurt companies like apple and gm. to announce that he is short fracas, following the headlines, david einhorn had a tough 2015, a slight comeback from january and we are seeing what he is doing in february. we will turn to david kelly, chief global strategist at j.p. morgan. david: thank you. i think it is fair to say there is a fair amount of fear and uncertainty in the marketplace. let's talk about some headwinds and how you rank them. we have oil, earnings, how about the presidential election and uncertainty? david kelley: i think that is contributing to it. right now, it is out of folks to say establishment. i actually like the establishment and it is the economy and what we have, but the anti-establishment rhetoric on both sides scares people that we could

einhorn 4.9 million shares. that is kind of interesting. stuart: that is not affecting the stock, but there is this huge story around apple. ashley: lastly with the fbi wanted to force them to come up with some sort of software that will break the encryption on the iphone taken from the terrorists in san bernardino. jo: it is a standoff of the ages and we expect a case to go potentially as high as the supreme court. that's what lawyers call me this morning. stuart: tim cook got a very strong statement. transfer it's no different than everything it stood for before. stuart: i think that might be an election issue to some degree. stuart: certainly a big debatable issue in congress. big tech names. we watch them every single day because that is where your money is going to past year. amazon 524 this morning. netflix at 90. we got back to 90 and netflix don't forget facebook moved about $100 a share recently back about 100 holding up 101 this morning, virtually dead flat. cheap oil. this is an extraordinary story. i had a lot of people in my fa

vonnie: some investors are losing patience with david einhorn after the worst performance ever.at least $600 million from the firm, 5% of assets lost. to stay withwing his value strategy. bp is feeling the pain from the lower oil prices. the company says fourth-quarter earnings fell 91%. has driven the profit down. -- taxi drivers protested uber. that is our bloomberg business flash. tom? -- wehe single best chart did this yesterday per michael bavaro in "the new york times" y, on theon the furo impatience, even the revulsion as what they see is a fixed system. here is a chart that maybe explains it. yearlpert, my chart of the two or three years ago, median household income, long, slope matters. green is really quite good, then pretty good after pauses. and then to a flatness. i am sorry, it is two americas, and vice chairman stanley fischer talked about that yesterday. dan: you cannot introduce 3 billion new people to the global economy and expect not to lose some income potential on the part of established economies. people are eating our lunch, as a practical matter, and that

david einhorn cutback holdings in apple just in time.es in the fourth quarter just before apple started to slide. apple is down 8% this year. the market is becoming saturated. goldman sachs says it is a deal that will not revive crude prices. goldman forecasts that the agreement between saudi and russia will have little impact on the oil market. last week, goldman said rice could drop below $20 a barrel. guy: thank you, caroline. javier blas, rationalize this market for me. tradinghe prices higher. give me a sense of what is going on. javier: the meeting that is happening as we speak in tehran, the iranian oil minister also meeting with iraq and venezuela. you look at the markets, gives you a sense of where people are putting their bet, yesterday we had traders buying protection for march. on the downside, they were buying puts. however, look at what they were demanding for june. prices going up to $35, even $50. guy: look at the scheme on some of the put options, the put calls, and they are huge. e volatility will continue. we are still

be something to see this buy which obviously is on the other side of when you have those orders of einhorn icahn selling, you're not allowed to talk about it. sell orders, you don't say, go tell your friends enthusiasm you've got $12 billion. stocks are down. people are saying, wait a second, this is going to hurt apple, the fbi issue, whatever. the private security issue. i do think you have to go back and say this dog has been in the doghouse for a long time. it's a cyclical now and they're getting a bit of a hype. >> to your point is there a return of capital or do they increase the dividend again? are there expectations that will be built in? >> you go back to what lowell mcadam -- who's going to be the jikt of ridicule after i speak to john legere. maybe ridicule is the price for doing okay but they think the iphone 7 is going to be gigantic. you have one more quarter everybody's worried about. when you worry about one more quarter, the stock doesn't go down. they don't really need it. they have enough firepower. any time they've had more firepower, stock jumps. it create as scenario

bass, einhorn soros and tapper. is this the b.e.s.t. trade out there? say this is another bank of england trade. if it is -- >> will be a whole gaggle of black swans. if the yuan were to drop 25%, 30%, i don't think that's at all possible, the world will be in a deflationary spiral because of this. if this is the case, i don't have to be short yuan, i will be long gold and be long bonds. >> let me stop you there. the reason i never believed wholeheartedly in the ian rand perspective of buy gold, the end of the financial eras as we know it, that's your trade, after watchi watchi watching central banks and central governors doing this over the past seven years, that they would let that happen. this rhymes with that trade. >> of course. i laughed at people who said there is no inflation, gold -- gold is not the hedge against inflation. it's a hedge against central banks losing control of the whole game. that's the deflationary spiral. >> a hedge against tyranny is what it is. >> it's the ultimate hedge. you've seen the move logically from 2013 to now that

they go from 19 to 3, david einhorn liked that stock. is he from queens? >> i don't believe he is. he's not. >> i would have said more positive things. >> he is not part of the great group of people who come from queens. such as carl icahn, or donald trump or jack lew. i'll go on and on. >> geez. >> paul simon. >> really? >> yeah. a lot of simons. >> yellen is from bay ridge. >> really? >> yellen from brooklyn. justice scalia was queens. >> where's neil diamond from and barbra streisand? >> i think brooklyn. >> there you go. these are companies that people have brought public to take advantage of energy, and they've killed people. the master limited partnerships, maybe they can come back, but holy cow. if this oil goes back to 25, we're back in the same soup. that's not where we want to be. >> apple's core response to the fbi's demand for that encryption breaking technology is due on the 26th instead of the original deadline today. more members of the tech community are supporting their fight against that judge's order to help unlock the phone of one of the san bernardino shooters.

einhorn is a great investor, i suspect he will come back through this. is market driven.ay out over time. one of my favorite bloomberg , you see the shift into consumer discretionary and pulling out of financials and infotech. >> go long financials. a lot of the far -- a lot of the shareholders are behind the scene sing so many parts are worth up to half more than the current market cap. i will give you your first play on bernie sanders as president. he wants to break up the banks. the parts are worth 40% more than the whole right now. activism could have a role in the banks. why are they so outspoken for the big bang's? >> this is the first time the activist had a director on the major bank. you have seems some changes. solar -- have some more activism. you have a lot of trapped value. does not invest in complex structures. people love them, leverage returns. one of your funds is down 8% this year. >> our business is a very simple business. you can leverage a one to one appreciate. very low-end financials, services, and businesses. there is some market to market volatili

in the last month -- it took bill ackman, you know, and david einhorn a year to throw es%.t took me a month. >> is that because of amazon. >> partly amazon. everything else. everything else is going down. >> you're not concerned. if you're fully invested there's not a way to buy additional shares. >> what we do we try to mon. etize the volatility. we try to add to ones that have gone down. >> i assume you're adding to amazon. >> amazon is a 10% position. so i can't say what we're doing but that's a very big position. >> can i ask you a psychological question. on a month like this how you feel and what do you about it. you had tough times before. >> really? yeah. yeah. andrew -- >> there's a lot of viewers who have their own bad months. >> i think my psychology, i think my mom must have dropped me on my head when i was 6 months old. i like lower prices. lower prices tell me i have higher future rates of return. when prices are high i get nervous. when prices are low i feel good. i like a market like this even though it drives people in my crazy. >> you can buy apple for $780