Some Thoughts On Einhorn Vs. Berkowitz (JOE)

David Einhorn made probably what was the news of the week at the Value Investing Congress, as he laid out his plan why Greenlight Capital was short The St. Joe Company

. The reason this is so important is that it's being billed as a battle of hedge fund titans, Einhorn versus Bruce Berkowitz, who is long the stock. Bruce Berkowitz of Fairholme Capital has come out and defended his position, by buying over 100,000 shares on Wednesday the day of the presentation. He also came out and spoke to Reuters and said, "I'd buy the whole company if I could. If we were able, we would buy the whole company," Berkowitz added. "I want to send him a box of chocolates. This is the kind of advertising you just can't buy. The company should hold a David Einhorn Memorial Investment Week. Einhorn "has put a big spotlight on this company. My advice is everyone should enjoy it and take advantage of it." Admittedly I haven't done my own homework on the company, but after having been at the Value Investing Congress on Wednesday, and hearing Einhorn's presentation, I have to say, it was one of the most thorough cases for shorting a company I've ever heard. If you wish to read the whole presentation, you can do so

He laid out a clear and concise case about the irregularities JOE has on its books, where impairments should be taken, and what the ultimate value of the company is worth. If Berkowitz was so high on this position, then why did he not debate Einhorn over the merits of his presentation? If someone were attacking something I owned or cared about, I most certainly would come to its defense. I would think anyone would. Yes he bought another block of shares, but when a company trades millions of shares per day, this isn't going to matter in the long run. When company management won't return your calls, there is something up there. Einhorn made his name by shorting Lehman at the same conference a few years ago, and was ultimately proven right. It seems to me that the market is believing Einhorn. I would tend to agree with Einhorn. If someone knows your business better than you do, and makes a case for a sharply lower valuation, it's worth listening to him. Disclosure: no position in JOE