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Whitney Tilson Underperforms S&P By 30%, Blames Bulk Of Miss On Netflix
Whitney Tilson, the consummate "value investor" is the latest confirmation of what we have been claiming since the beginning of 2010: namely that with the Fed's intervention in capital markets, those who plan on making money using a gold old fashioned long-short, 130/30 portfolio distribution, value trading are in the bullseye of central planning. What has happened over the past year, when courtesy of the Chairman's endless market manipulation, is that the worst of the worst stocks, those traditionally shorted by all, the 5x beta crapshoots, were the ones the screamed higher, with State Street and BoNY making it impossible to hold shorts in anything, not to mention repo desks calling in borrow on a daily basis, and killed traditional fundamental analysis, where good companies are purchased, and bad ones are shorted. Congratulations Bernanke: with your reckless destruction of prudent capital allocation decisions, you will put every single "value investors" out of business. Which is why we feel for Whitney, who despite his seemingly constant appearance on CNBC at one point talking his book, returned just 10% net for his fund, compared to the S&P which did about 50% better. Hopefully the redemption requests leave something in their wake. On the other hand, like every single self-respecting asset manager, Tilson blamed the bulk of his underperformance on Netflix. Of course, he is absolutely right: the company is worth exactly nothing, but it will likely take a few years for the momo crew to figure it out. By then, all shorts in the name will be but a memory.
h/t StockBox and Steve Jobs
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At least his long BP call went well for him..
Value investors did poorly.. my stock selection was disaster too. short and long but more than half money in gold and silver so that made up for it.
i'm 100% gld/slv for 2yrs now. been chuckling ever since at my $/work ratio.
trying to make $ in the makets now is like a sentence to hard labor.
Top is in Dan.
steve jobs: the latest ZH contributor
he's short AIG, LULU, NFLX, CRM... ouch...
JDS Uniphase was a tuff short at $250 also. Seen them lately? BTW need any old Redback Net certs?
I would prefer your old CMRC (Commerce One) certificates
didn't he get the memo?
buy the dip
that is all
This means that Ackman's miss on Borders was sheer stupidity.
maybe he should have uncle Ben over for some crow
Someone tell Tilson fundamentals are dead. HFT computers don't value "value".
At the poker table you don't play your cards (fundamental), you play the other players and how you/they bet. (technical)
If you read the Seth Klarman letters through the 1990s he consistently underperformed the SP500 as a valuev investor. He kept talking about a bubble as early as 1996 and how all this was going to end in tears - - sooner or later.
Klarman stayed disciplined and underperformed all the way through 1999 and then kept making money through 2000/2001/2002 when the equity markets fell apart world wide.
Tilson or other value investors underperforming the marktes in 2010 has NOTHING to do with Fed "market manipulation" or a "broken market". Klarman in the 90s was just as much or as little manipulated as it is today.
For anyone interested the Baupost letters are available here: http://www.scribd.com/doc/14576127/Baupost-Fund-Letters
Always a great read.
......fundamental stock picking and shorting is dead...after 40+ years I threw in the towel last fall...only own a couple of silver miners and one high spec oil exploration company....it is amazing what has happened to our stock market between Ben and the HFT algo's....it has been ruined and no one "in charge" appears to care that its fundamental purpose has disappeared...but they will eventually.
My friend Eric was a broker in 1999; he was a disciple of Dave Dreman and had gold mines and other value plays and sat out the NASDAQ eruption. I don't think he owned any puts. He bought stuff when he thought the downside was basically in.
He cleaned up after March 2000. He was wired as a pessimist and couldn't hold his nose and buy. It just wasn't his market until 2000.
For those value investors out there, sometimes a good strategy is to pick up some above-average dividend yields which are safe and, even better yet, ever-increasing their pay-outs.
Gives one a few bucks every quarter while awaiting out the eventual big pay-day.
Better than nothing.
netflix .... hahaha what a joke. the blockbuster of the 21st century.....like there's no barriers to entry there......
How does BoNY make it imposible to hold a short?
It is very possible to hold a bony short. Ask my wife if you dont believe me...