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The Morning Brief: AIG Edges Out Apple; Greenlight Capital Investor Takes Issue with Einhorn

Forget Apple. American International Group is now the top stock pick among hedge funds, edging out long-time leader Apple, according to a Goldman Sachs Group report. Hedge funds’ net long exposure to stocks climbed to 52 percent in the fourth quarter. And for the first time in three years, Apple was not the favorite holding, falling to third place as insurer AIG took the most-held spot. Shares of AIG rose 7.65 percent in the quarter.

Greenlight Capital investor Nathan Cummings Foundation is at odds with hedge fund manager David Einhorn on Apple. In a letter to Einhorn, a copy of which was obtained by the Financial Times, the foundation said, “By threatening to disenfranchise Apple shareholders, Greenlight Capital has acted in a manner that is not consistent with our understanding of Greenlight Capitall’s own orientation and investment philosophy, the newspaper (FT paywall) reported Thursday.
On Thursday afternoon, meanwhile, Einhorn turned his bullhorn toward shareholders in a conference call, detailing the benefits of distributing perpetual preferred stock, the core of his campaign to push Apple into rewarding shareholders. During the call, he dissed Dell founder Michael Dell on his plan to take the company private in a $24.4 billion leveraged buyout, saying, “Dell’s go-private effort shows the disingenuous nature of hoarding cash.”

Hedge fund legend Stanley Druckenmiller called for immediate action to address the nation’s debt problem and focus on entitlements that are scheduled to reach $700 billion in the next four years. “Eventually the hamster can’t move on the wheel anymore,” he told CNBC in a rare appearance.

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