If you’re feeling the pain from the recent selloff, you’re not alone. David Einhorn is probably feeling it, too. The investing guru is in the process of recovering from one of his worst years on record.

Einhorn’s firm, Greenlight Capital, lost 20% of its value in 2015. The S&P 500, by contrast, gained about 1%. And after the rough selloff we’ve experienced to start 2016, things might be looking even worse.

This was only the second losing year in Greenlight’s nearly 20-year history. The fund has returned 1,902% over its existence, or 16.5% annualized, after fees and expenses. The other losing year was, understandably, in 2008. The fund’s value dropped 23% that year.

#-ad_banner-#Posting a year like Einhorn did means that not only are his fortune and reputation at stake, but so too are the fortunes of those who’ve invested with his hedge fund.

But before you shed crocodile tears for a hedge fund billionaire and the wealthy individuals who participate in Einhorn’s fund, just remember that if one of the most successful investors of the modern era can suddenly witness a sea of red wash across his portfolio, then so can you and I.

So what went wrong?

Einhorn’s fund uses a long/short strategy. Basically, this means that he goes “long” on what he sees as deep-value bullish plays (in the vein of Warren Buffett and Ben Graham) while shorting companies that he bearishly thinks are overvalued.

In most years, this strategy led to fantastic results. Making 16.5% a year is nothing to scoff at. In fact, it’s pretty remarkable — the market has returned less than 5% annually during the same time frame. But last year, Einhorn got hit on both sides.

Here’s what he had to say about it in his Q4 letter to investors:

Einhorn went on to highlight in detail how they “failed to monetize nice gains” in stocks like Micron and SunEdison, and that they had an uncharacteristic number of losers that were not offset by any standout winners. He also pointed to the “difficult environment” for value stocks, drawing a parallel to the tech bubble and the 2008 financial crisis as the only comparable periods when value investing was so out of favor with investors.

In short, Einhorn says, “We have never had a year where so little went right.”

The Difference Between Good Investors, And Great Investors
I should note that David Einhorn also moonlights as a world-class poker player. He’s been spotted at numerous high-profile tournaments, including the 2006 World Series of Poker, where he placed 18th. So it would seem odd that he would forget to “know when to hold ’em,” and “know when to fold ’em,” as country legend Kenny Rogers sang. It is, after all, one of the most important lessons of poker, as well as investing.

But hey, it happens to the best of us. Buffett has made his share of mistakes, too. Yet there are certain qualities investors like Einhorn (and Buffett, and Carl Icahn, etc.) have that make them different from most individual investors. And, no, I’m not talking about having millions or billions of dollars to work with in the first place.

I’m talking about things like patience, discipline and humility. A willingness to learn from mistakes, and move on. To see what I’m talking about, read Einhorn’s letter here. Outside of Warren Buffett, you’ll rarely find this kind of candid self-critique from anyone on Wall Street.

It’s worth studying the mistakes of some of the best investors in the world as well as taking a look at what they do differently going forward. And I’m sure if you were to ask David Einhorn what he’d do differently, he’d say he would’ve cut his losses earlier. He would have booked gains more quickly. But I also know that he’ll stick to his methodology, because he knows his system works, and he knows the tide will turn.

Think on this as you try to grit it out in this rough market. 

Examine your investment philosophy and make sure it’s sound. Be objective. If it’s been working for you for several years, then stick to it. Make sure the positions of your investments aren’t unnecessarily large. If things go south, it could wreck your overall portfolio. 

Reinvest dividends at these lower prices. Keep cash on hand for when the dust settles. And if you find yourself glued to financial news on television, then do yourself a favor and change the channel. 

A Detailed Look At Our Most Successful System
Starting this week, our publisher is reopening access to our exclusive proprietary trading service, Maximum Profit. This service is run by my colleague Jimmy Butts, and he’s used this system’s closely-guarded algorithm to find stocks that gained 89%, 127% and even 150% within as little as five months. 

I worked closely with our team on developing this system, and I can personally attest to its effectiveness. In short, its ability rests on three keys:

1. Taking emotion completely out of the equation… so you can avoid selling stocks too early or too late

2. Pinpointing the fastest rising stocks in the market… so you only buy stocks that are going up

3. Capturing bigger gains in a shorter amount of time… so you can move on to the next trade and avoid tying up capital in positions that are going nowhere.

We’ll be taking a closer look at how Jimmy’s Maximum Profit system works over the next few weeks, as well as get his thoughts on what investors should be doing in today’s market. In the meantime, you can learn more about the Maximum Profit system here.