David Einhorn, the billionaire founder of Greenlight Capital, is the kind of Wall Street investor that can make markets move with a simple announcement that he is considering buying or selling a stock. So respected are Einhorn's opinions among the broader investment landscape that analysts pore over Einhorn's annual letters to investors in his company for hints as to what the market may do and how they can improve their investment decisions in the weeks, months, and years to come. Because of this sway that he holds, Einhorn has made headlines once again with the recent announcement that his company has "dramatically increased" its position in General Motors (GM), the automotive manufacturer.

Keys From an Investor Letter

The news of Einhorn's plans, reported by Business Insider and revealed in a quarterly letter to investors in Greenlight Capital, may come as a surprise to some, as GM stock has already climbed a dramatic 27% in the past year, according to data by Markets Insider. Einhorn offered an explanation for his purchase in the letter to investors, rebuffing those who might suggest that entering a large position of this type at this particular time is foolish. Einhorn indicated his firm's belief that "a strengthening job market will sustain the current upcycle and lead to better than expected credit performance at GM's finance subsidiary."

Self-Driving Cars a Concern?

One of the biggest questions on the minds of investors who are considering making moves in the automotive world is that of self-driving cars. With a few examples of self-driving cars already in testing and production, many investors wonder if the coming years will see a major shift away from the standard automobile model. Einhorn also dismisses these concerns, saying that his company sees "a huge intermediate-term opportunity in assisted-driving cars," adding that "in any other industry, investors would be enthused by the developing upgrade cycle," which could help to garner new customers over time.

For GM itself, Einhorn claims that the "valuation is extreme: at its year-end price of $34.84 per share, GM trades at less than 6x earnings." Citing its foreign operations, which hardly make any contribution to its profits and thus stand to improve over the longer term, as well as potential changes in capital structure that could increase the company's value, Einhorn presented his argument that GM was a worthwhile stock to consider at this point in time. The billionaire did not, however, indicate the exact size of Greenlight's position or recent purchase.

Greenlight, based in New York and focused on stocks, is a hedge fund with about $8.6 billion in assets under management as of the middle of 2016. The flagship fund returned 4.5% in the last quarter of last year.