Should You Trust David Einhorn? (Update1)

Tickers in this article: AAPL GLRE GMCR MCO MHP MLM MRVL
(Updates story to say 2012 returns totaled 7.9%.)

NEW YORK ( TheStreet) -- Hedge fund manager David Einhorn of Greenlight Capital said Wednesday that ratings agency Moody's(MCO) was his biggest money-losing short bet last year. As Einhorn made little mention of the short position -- betting on a decline in Moody's share price -- in numerous investor reports and media appearances, the famed short seller's comments raise a crucial question.

Should you trust David Einhorn?

It's a relevant topic, given his front-page battle with Apple(AAPL) over the iPhone and iPad maker's management of its purse strings. Meanwhile at investor conferences, Einhorn's been able to dramatically swing stocks when announcing new trades, such as recent short positions in the likes of Chipotle Mexican Grill (CMG) and materials giant Martin Marietta (MLM) .

Consider Einhorn's fourth-quarter letter to investors, which highlighted a souring of Greenlight's investment in Apple, a burned bet against coffee maker Green Mountain Coffee Roasters (GMCR) and a wrong-way trade in Marvell Technologies (MRVL) , among a handful of positions that caused the fund to fall in the quarter. A 2012 gain of 7.9% put Greenlight below the overall market.

"Our coffee was too hot, our apple was bruised, and our iron supplements didn't go down smoothly. We got to marvel at a jury's decision to endow a university with a billion dollar verdict, and tried not to get too moody when several of our shorts melted up," Einhorn said in the fourth-quarter investor letter.

In the letter, Einhorn highlighted the short bet in Green Mountain Coffee Roasters as a problematic 2012 trade in the company's short portfolio.

"The losses in the short portfolio were broad-based; while the S&P 500 was down modestly in the quarter, our average short rose about 10%. Green Mountain Coffee Roasters was the worst offender, with a 74% advance that wiped out our 2012 profits on the position," Einhorn wrote in a Jan. 23 investor letter.

As it turns out, Einhorn may have been most "moody" because of a long-running bet against ratings agency Moody's stock, which gained nearly 30% in 2012.

"Our biggest loser on the short side last year was Moody's," Einhorn said Wednesday on a conference call for Greenlight Re (GLRE) , an insurer affiliated with the hedge fund.

A look through Greenlight's previous 2012 quarterly investor letters shows little mention of Greenlight's short position in Moody's, other than perhaps the subtlest mention.

Prior to Wednesday, Einhorn's most recent direct reference to the trade came in response to an audience question at an October investor conference .

Einhorn's coyness and his increasingly public stature raise big questions, especially as the successful short seller of Lehman Brothers wages his most public activist campaign in a suit against Apple over its 2013 shareholder proxy.