In a conference call with analysts, Einhorn said last year's massive run for stocks was fueled in part by misleading earnings reports.
"In 2013 the market rewarded many companies beating earnings after they had lowered guidance," Einhorn said while discussing the performance of reinsurer
Einhorn is one of the most respected and successful investors on Wall Street and the founder and president of the hedge-fund firm Greenlight Capital Inc.
He said Greenlight Re benefited from holdings in
"We also avoided getting hurt too badly in our short portfolio by having minimal exposure to the most speculative stocks many of which appeared to have completely disconnected from normal valuation methods," Einhorn said.
The widely watched Standard & Poor's 500 index soared 29.6% last year, it's biggest gain since 1997. Things have been rocky this year, with the Dow down nearly 3% and the S&P 500 off about 0.5% through mid-day Wednesday.
"The market ended the year on a strong note after a huge move that was supported mostly by multiple expansion as earnings growth was lackluster," Einhorn said.