you've declared the markets quote fundamentally broken that's sort of the the terminology that you've used now obviously you've adapted as you said well because you're coming off of a really strong year you're 22% net of fees which I think followed one of the best years that Greenlight has ever had so you've made the move but you've also suggested to me that because you think the markets are fundamentally broken that means fewer companies are going public right that that's one of the ideas that
you have these sort of this change has reverberated through the whole Market structure yes absolutely when I say that the market is broken what I'm saying is is there's not enough money that is being dedicated to investing trying to identify undervalued companies and reward companies and with new capital that have good opportunities for growth and to punish companies that that don't have such good situations because the professional industry of figuring this stuff out has largely been eradicated
and so the main problem that comes from that is is you just wind up where index funds or other strategies they're going to buy whatever is the most overvalued thing because they get the biggest weight in the index so new money comes and overvaluation becomes more overvalued undervalued becomes even more undervalued and and values actually diverge from fair value rather than come to fair value but there's other ramifications of that once you have the largest shareholder in every major important
company be a passive fund shareholder activism becomes nearly impossible to improve corporate governance because if you go to one of these index funds and you say I have an idea for how this company could improve that will make the stock price go up they just kind of look at you and go well we want all the stock prices to go up they don't prot and they don't have anybody on those proxy departments that even know how to value a company let alone vote index shares in that kind of way another thing
that's come obviously is the IPO Market the S&P is making highs right we're in a favorable economic environment yet where's the IPO Market why aren't companies able to come public and the reason is is companies used to do these things called Road shows and they would come to these managers these long only managers and they' say hi I'm the midcap manager of the such and such fund would you like to buy my new stock and if that person isn't there or they don't have any new money there's no one to
buy that stock and so you have a closed IPO Market even in the face of really really uh favorable market conditions otherwise I want to talk about some other positions that you have within the market because one of them frankly surprised me when I read one of your letters which suggested that you quote stayed committed to the turbulent Regional banking industry and you bought more New York Community Bank in the fourth quarter so I guess I sat back and said wait a minute einhorn's supposed to be
the guy who's saying no the regional banks are the ones with all the problems because of commercial real estate but then you buy New York Community Bank why right our theory was when they did the acquisition of the failed banks that happened roughly last March we bought all of the regional banks that were the purchasers of the failed Banks because we thought that they would get really good discounts and we did it several times and all of them except New York Community Bank worked but when New Yo
rk Community Bank came out with their result and and took their charge we we immediately just sold all of the stock and we exited it actually a very small loss oh you did okay so you're You're gone from those stocks um in terms of the market overall you've spoken before about Bubble baskets of of names and names that have gone you know parabolic because of various trends that happened to be going on at that particular time now obviously the focus is on a I you made jokes about AI during your pre
sentation today Steve Cohen was on our Network today said this is not like 1999 that there's no bubble in the market AI is durable that's the word he used and would lead to Greater productivity and and efficiency you agree with that you think we're in a bubble what's your view no I I don't particularly think we're in a bubble we covered our bubble basket stocks in the first quarter of last year and uh right now all of our shorts are idiosyncratic ideas based on situ with the particular companies
that are involved we don't have any basket short positions right interesting
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