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By Svea Herbst-Bayliss and Matthew Goldstein
BOSTON/NEW YORK, April 12 (Reuters) - This year's sell-offin gold has been harmful for dedicated gold-bugs like hedge fundmanager John Paulson but it has also hit managers like DavidEinhorn who is better known for his stock picks than his love ofthe yellow metal.
During the first quarter, however, Einhorn's GreenlightCapital Management demonstrated just how much he and hisinvestors have riding on gold as he recently listed it as thefund's third largest position, an investor in the fund said.
Only bets on computer maker Apple, a long-timefavorite with Einhorn, and General Motors, which hestarted talking about late last year, outranked his goldposition in size.
During the first quarter, Einhorn returned 6.1 percent,keeping pace with many rivals including Pershing SquareCapital's William Ackman who was also up 6.1 percent. But theyboth lagged behind the broad Standard & Poor's 500 index whichclimbed 10 percent.
Gold selling has continued in the second quarter, its pricefalling another 7 percent this month.
Einhorn, who is believed to largely own physical gold asopposed to shares in the exchange-traded fund, disclosed his topfive holdings in a recent communication to investors.
Besides including gold in his main fund, Einhorn, likePaulson also has a dedicated gold fund. Paulson's dedicated goldfund, the smallest in his lineup of portfolios, lost 28 percentduring the first quarter.
A spokesman for Einhorn declined to comment.
While gold is often used as a hedge against inflation thebreadth of the recent sell sell-off will underline someexpectations that gold's meteoric rally may be coming to an endafter 12 years of gains.
The relentless selling sent gold below $1,500 an ounce forthe first time since July 2011, and put the market on track forits worst weekly performance since December 2011.
Industry analysts have said that rising markets generallymake for tough conditions for hedge fund managers thatspecialize in stock picking.
Einhorn also listed Marvel another long-timefavorite, and Vodafone as other big holdings.
At the end of the month Einhorn's fund was 48 percent netlong in its position. That means that long bets where a managersexpects the securities to rise represented 125 percent of thefund's holdings while short position where a manager bets that asecurity's price will was fall made up 77 percent.
During the first quarter, Einhorn made headlines in thenormally secretive hedge fund world for his loud campaign to getApple to give back some of its cash pile to investors.
Some investors have called the battle with Apple distractingfor the manager, particularly as other big Apple investors werenot on his side.
Einhorn like other managers is expected to soon send hisquarterly letter where he explains his holdings and thoughts ingreater detail.
Over the years, Einhorn's holdings of physical gold haveraised some eyebrows, in part because it is difficult to houseit. Einhorn has selected a secured facility in Queens, close tohis Manhattan office, to store the gold bullion he holds.
Einhorn's spokesman declined to comment on speculation aboutthe location of the hedge fund's so-called physical gold.
Greenlight began investing in gold bars in its main flagshipfund in 2009. A year later, Einhorn launched a dedicatedgold-only fund for investors wanting a more concentratedexposure to the precious metal.
