Have you ever watched a stock you once loved crash hard and wondered if it was time to walk away for good—or if the panic was overblown? That exact question seems to be on the mind of one of Wall Street’s sharpest investors right now. When shares of a certain connected fitness company plunged more than 25% in a single day after disappointing holiday results, most people probably hit the sell button without a second thought. Not this guy. He doubled down. And he’s not alone in his thinking—there are a few other beaten-up names he’s quietly adding to his portfolio.
I’m talking about David Einhorn, the founder of Greenlight Capital. Known for his deep-value approach and willingness to go against the crowd, Einhorn has a track record of spotting opportunities where others see only risk. Recently, he shared some fascinating insights into his latest moves, and I have to say, they make you pause and rethink what’s “dead” versus what’s just temporarily out of favor. Let’s dive in.
Why Contrarian Investing Still Works in Today’s Market
Markets love to overreact. One bad quarter, one missed expectation, and suddenly a stock is toxic. But seasoned investors know that knee-jerk reactions often create the best buying opportunities. Einhorn has built his career on this principle. He doesn’t chase momentum; he hunts for mispriced assets where the fundamentals tell a different story than the headlines. And right now, he’s seeing a few situations that fit that bill perfectly.
In my experience following these kinds of moves, the really interesting bets aren’t the obvious winners. They’re the ones everyone has given up on. When sentiment hits rock bottom, that’s often when the smartest money starts accumulating. Einhorn’s recent comments highlight exactly that mindset. Let’s break down what he’s doing and why it might matter.
Peloton: Not Dead, Just Misunderstood?
Peloton has been one of the most dramatic stories in recent market history. During the height of lockdowns, demand for home fitness equipment exploded, and the stock soared to dizzying heights. Then the world reopened, gyms filled up again, and the company faced a harsh reality check. Subscriptions slowed, equipment sales dropped, and debt concerns crept in. The result? A stock that once traded well above $150 now languishes below $5.
Most investors looked at the latest earnings miss and saw confirmation of a permanent decline. Einhorn sees something else. He believes the market has punished the stock too severely. New leadership is making tough but necessary decisions—cutting costs, focusing on cash flow, and positioning for a more sustainable future. The balance sheet is improving, debt refinancing looks manageable, and he argues the business isn’t in some irreversible tailspin.
I don’t think Peloton is in secular decline. New management has come in. They’re cutting costs. There’s quite a lot of cash flow. They’ll refinance their debt in a few months. I think it should be okay.
– Experienced hedge fund manager
That’s a pretty bold take when most headlines scream “caution.” But here’s the thing: contrarians win when they’re right about mean reversion. If the company stabilizes its operations and the brand retains loyalty among its core users, the downside might be limited while upside remains meaningful. Of course, it’s risky—turnarounds are never clean. Yet Einhorn’s willingness to buy on weakness suggests he sees more value than risk at current levels.
I’ve always found it fascinating how fitness trends cycle. What was once a pandemic necessity became a luxury again. But habits die hard. People who invested in high-end home equipment aren’t likely to abandon it entirely. Perhaps Peloton can carve out a profitable niche rather than trying to dominate everything. Time will tell, but this bet feels like classic value hunting.
Acadia Healthcare: A Leadership Reset Worth Betting On
Next up is a name in the behavioral health space. Acadia Healthcare provides essential services in mental health and addiction treatment—areas that, unfortunately, remain in high demand regardless of economic conditions. Yet the stock has fallen dramatically from peaks above $80 to around $13 recently. What changed? Plenty of operational challenges, regulatory scrutiny, and leadership transitions.
Einhorn points to a key development: the return of a former CEO who oversaw a strong growth period in the past. That kind of continuity can make a real difference. Familiarity with the business model, proven execution, and renewed focus on fundamentals often breathe life into struggling companies. He believes the current price reflects too much pessimism, and a gradual recovery could take the stock meaningfully higher.
It’s hard to argue with the logic. Mental health services aren’t going away; if anything, awareness and need are growing. A well-run provider should benefit over time. Of course, execution risks remain, but the valuation seems to already price in a lot of bad news. When shares jumped double digits after Einhorn’s comments, it showed the market is listening. Perhaps there’s more room to run if the turnaround gains traction.
- Strong underlying demand for behavioral health services
- Experienced leadership returning to the helm
- Valuation compressed after years of decline
- Potential for meaningful recovery if operations stabilize
These points make the case compelling, at least for patient investors. I’m not saying it’s a slam dunk, but it’s the kind of situation where good things can happen when sentiment flips.
Deckers Outdoor: Timeless Brands Still Resonating
Then there’s Deckers Outdoor, the company behind popular brands like UGG and others in the footwear and apparel space. The stock has pulled back roughly 28% from recent highs, but Einhorn remains positive. Why? Because strong brands tend to endure. Consumers keep coming back to products that feel authentic and desirable, even in tougher economic times.
Deckers has built a portfolio that resonates across demographics. UGG, in particular, has transcended seasonal trends to become a staple in many wardrobes. That kind of staying power matters. Einhorn sees the current pullback as a chance to accumulate shares in a business with solid consumer loyalty and pricing power. It’s not flashy growth, but reliable demand.
Consumer discretionary stocks can be tricky when spending tightens, but premium brands often hold up better than mass-market names. If economic conditions stabilize or improve, Deckers could see renewed momentum. For now, the dip looks attractive to someone with a long-term view.
A Cautious Stance on Housing and Broader Market Risks
Not everything looks rosy to Einhorn. He has a decidedly negative view on the housing sector, calling it structurally challenged. High interest rates, affordability issues, and a persistent shortage of homes create a tough environment. Builders and related stocks face headwinds that could last for years. It’s a reminder that not every dip is a buying opportunity—some declines reflect real problems.
He also maintains high-conviction short positions, though he’s keeping the details close. Interestingly, he notes that short sizes have shrunk in recent years due to the rise of retail trading and meme-stock dynamics. That makes shorting riskier than it used to be. Still, his willingness to bet against overvalued areas shows discipline.
Broader market valuations concern him too. When stocks look this expensive relative to history, caution makes sense. Einhorn’s balanced approach—long undervalued names, short overpriced ones—has served him well over decades. It’s not about being right every time; it’s about asymmetry. Win big when right, lose small when wrong.
What Retail Investors Can Learn From These Moves
So what does all this mean for the average person managing their own portfolio? First, it pays to think independently. Crowds are often wrong in the short term. Second, focus on fundamentals over headlines. Third, have conviction but manage risk. Einhorn isn’t putting everything into one idea—he’s selective and patient.
I’ve found that the best opportunities often come when fear dominates. It’s uncomfortable to buy when others are selling, but that’s where edges form. Of course, do your own homework. These are high-risk ideas, not guarantees. But watching smart money move can spark useful questions about your own holdings.
Perhaps the most interesting aspect here is the reminder that markets are cyclical. What looks broken today might heal tomorrow. Peloton, Acadia, Deckers—each has unique challenges, yet each also has potential catalysts. Whether Einhorn is right or wrong, his process is worth studying.
Investing isn’t about chasing the next hot thing. It’s about finding value where others aren’t looking. Sometimes that means going against the grain. Sometimes it means waiting. Either way, staying disciplined in volatile times separates winners from the crowd.
As we move deeper into 2026, keep an eye on these themes. Turnarounds take time, but when they work, the rewards can be substantial. And who knows—maybe one of these picks becomes the next big success story. Or maybe not. That’s the game.
One final thought: markets reward patience and punish emotion. Einhorn’s bets remind us to stay calm when everyone else panics. Easier said than done, but worth striving for.
