2 Grand Central Tower • 140 East 45 th Street , 24 th Floor • New York, NY 10017
Phone: 212-973-1900 • Fax 212-973-9219 • www.greenl ightcapital.com
January 19, 2010
Dear Partner:
Greenlight Capital, L.P., Greenlight Capital Qualified, L.P. and Greenlight Capital
Offshore (collectively, the “Partnerships”) returned 5.4%, 6.0% and 6.3%1 net of fees and
expenses, respectively, in the fourth quarter of 2009, bringing the respective full year net
return to 36.9%, 33.7% and 30.6%.1 Since inception in May 1996, Greenlight Capital, L.P.
has returned 1,397% cumulatively or 22% annualized, both net of fees and expenses.
The end of the decade evokes thoughts of where we were a decade ago. Ten years ago we
were in the midst of a historic melt-up of technology stocks. There was no way to know
when they might stop rising. In fact, we had just witnessed a bull market lasting most of
the previous twenty years. The United States had a balanced budget and the discussion
was about how to spend the surplus. The leaders of the Federal Reserve struggled with
technical problems in the market due to a shortage of “risk-free” government debt.
American hegemony was omnipresent economically, scientifically, militarily and
culturally.
Who would have thought that a decade later, stocks (especially technology stocks) would
generate negative returns, the U.S. would have record deficits, and “risk-free” interest rates
would react to an increased supply of treasuries by falling sharply? Through this decade of
challenging investment performance, the Partnerships net return was approximately 350%
or over 16% per year, and though it was not a goal, we outperformed the S&P 500 each
year with less volatility.
In reflecting on how much has changed in the last decade, we have come to realize that
many things that appear unthinkable can easily occur within a ten-year timeframe. The
range of possibilities for the next decade appears terribly wide. It is possible that the
re