T1 Is Not T2: Goodbye Whitney Tilson?

Tyler Durden's picture


From the inbox:

Tilson splitting from Tongue, unwinding T2 Partners, new fund at KASE Capital

We very much hope our tipster is wrong: after all how will CNBC Fast Money viewers know to buy JCP at $27, and $26, and $25, and $24, and all the way down to $19 where it is today. Also who could have possibly foreseen the end of a mega long-biased end of a $345 Million fund which had over $125 million in long derivative equivalents? Oh wait...

From May 15

For all the totally inexplicable facetime T2's Whitney Tilson gets on prime time financial comedy air, one would imagine that the man runs billions and billions. Instead, as per the just released 13F, Tilson's fund has a grand total of $345MM in long AUM as of March 31. So far so good, however that does not explain why the manager has a Sharpe ratio of roughly 0.00 in the past 3 years. Well, now we know: of the $345 MM total, a ridiculous $104 Million is in call options! In other words, not only is Tilson nothing but a bullish bet that copycats various other select hedge fund portfolios, it is a mega-levered one at that, with what appears ridiculously high theta! It get's worse: as it turns out, another $24MM or so is... in Warrants. Yup: all levered products without actually owning the underlying, leading to massive monthly swings in actual P&L. In other words, real assets held by Tilson amount to $217 Million. And one wonders why the fund can be up 20% one month and down 30% the next... or how Tilson can spend hours a day on TV.

Here is the drill down:

  • Tilson's top position is a $76.3 million call option on Berkshire.
  • Of $345MM in long positions, $104MM are CALLS
  • Of the remainder, about $24 million are warrants
  • The top 5 positions are nothing but a levered pro-cyclical call: 3 out of 5 positions are Berkshire Call, stock and a Goldman call.
  • Tilson has 50 positions that amount to less than $5MM in AUM
  • When eliminating options, Tilson's 10 largest positions are Iridium, Howard Hughes, Berkshire, Citigroup, JC Penney, Netflix, Sandisk, Goldman, AIG and Alexander and Baldwin
    • Of these, Irridium is a Warrant.

End result: we expect many more appearances from the Call buyer on CNBC, where he gets a few hundred dollars for every appearance. Trust us: he needs the cash.

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Wed, 07/18/2012 - 09:48 | 2627750 francis_sawyer
francis_sawyer's picture

I hear McDonald's is hiring for part time graveyard positions...

Wed, 07/18/2012 - 10:00 | 2627787 Pladizow
Pladizow's picture

I could handle being a multi millionaire, who apperas on national television and have bloggers make fun of me.

Wed, 07/18/2012 - 10:17 | 2627871 francis_sawyer
francis_sawyer's picture

 "Maybe so, but at least I won't be unoriginal"

~Will Hunting

Wed, 07/18/2012 - 10:06 | 2627815 TheGardener
TheGardener's picture

Back in old Europe , Germany , the unemployed have to take
ANY position. 1 Euro/hour jobs sweeping the forests is not the most extreme example, after all they have to pay their own public transport to get to those forests so they might
net 1 Euro/day. (For not loosing benefits that cover more
than basics)

For displaced investment bankers, running a tiny 345 mil fund is just an equivalent to those make-work-schemes, incentives vary according to the leaves being swept either on or off wind.

Wed, 07/18/2012 - 09:45 | 2627752 Eireann go Brach
Eireann go Brach's picture

He must be related to Tim Geitner!

Wed, 07/18/2012 - 09:46 | 2627755 Seize Mars
Seize Mars's picture

What a moron

Wed, 07/18/2012 - 09:52 | 2627768 Budd aka Sidewinder
Budd aka Sidewinder's picture

'Whitney what's the rationale behind owning Xerox?'

'We didn't have any companies that started with X'

Wed, 07/18/2012 - 09:53 | 2627770 buzzsaw99
buzzsaw99's picture

He must be up on the berkshire calls.

Wed, 07/18/2012 - 10:04 | 2627805 LoneStarHog
LoneStarHog's picture

I guess the Whore Street genius should have checked with middle-of-the-road America about those JC Penny advertisements promoting the gay/lesbian agendas, rather than the gay/lesbian organizations.  Since the first advertisements appeared, JC Penny's stock has been in rapid decline, as has its sales. Nice going, genius.

Wed, 07/18/2012 - 10:36 | 2627964 Shizzmoney
Shizzmoney's picture

JCP has bigger issues than advertising.  They can't unload their investory and are cancelling orders for new shit to sell (I know, I spent 2 days setting up shit for them for my company, only to have them ceancel it 2 weeks later).

Wed, 07/18/2012 - 10:43 | 2627998 LoneStarHog
LoneStarHog's picture

"They can't unload their inventory..." Uh! Yes! Gee, could "advertising" be one of the causes for not being able to "unload"?

Wed, 07/18/2012 - 10:56 | 2628074 catacl1sm
catacl1sm's picture

People don't want their retailers (or search engine companies) to get involved in politics or social issues. People want them to concentrate on what they do, sell clothes, or whatever. The backlash for getting involved in politics or social issues for companies is NEVER good. I've made it a point to stop using Google search simply because of their new LGBT love fest bus tour. JCP should NEVER have tried to make a social statement with their advertising, it's far too polarizing. Dumbasses. However came up with that should be fired.

Wed, 07/18/2012 - 11:30 | 2628233 TheGardener
TheGardener's picture

Politically , people have became dangerously immune to PC,
but any company outsourcing their PR to a PC compatible
agency is viewed as a spent force in today`s environment.

Like the black sheep for president to lay the blame on
is a spent force as intended, at least he turned out
to be the truly marxist genuine thing, as a mixed thing
from nowhere he had no color issue and at least explicitly
challenged every entrepreneur regardless of gender and race
to a point of no return . Make no mistake, they are at war.
Not you not me anywhere in between : Entrepreneurship is at
stage and this stooge challenged it without remorse.

Nothing short of a declaration of war has this black
sheep announced in his soft manner.

Wed, 07/18/2012 - 11:43 | 2628286 writingsonthewall
writingsonthewall's picture

Like the black sheep for president to lay the blame on

You clearly have no constructive or sensible arguments if you have to resort to that.


Sounds to me like you blame obama for your business going bust and having no customers.


This is a typical "free market" argument from another hypocrite - when it goes well - it was all down to the genius of the individual (you) - when it goes wrong it's Government's fault.


You have no customers because we're in a depression FOOL.

Wed, 07/18/2012 - 11:34 | 2628247 ReactionToClose...
ReactionToClosedMinds's picture

can't speak directly to JCP ... but have heard anecdotally  and seen ...... retail inventory back-ups in many sectors.

Something is going on and either there is duplicitious "reporting' (rant warning - sorry: there are still some great journalists left at NYTimes .... but the newspaper has gotten so caught up in it's ideology they have forgottten their original objective ... relaying relevant information  .... so any and all  Republicans is/are a wanna be facist/racist/redneck/idiot, warmongering, Sarah Palin/Dick Cheney loving, tea party captive, etc. .... well that elminates a good chunk of the population of the largest & most succesful economic entity the world has ever known ....)  ... or folks do not want to see/face what is happening ...  it is called 'negative aversion'.

Over a month ago, Barron's reported via its Statistic editor extract that electrical power use had dipped 1.5% lately  ... something unusual not explainable by assumed succcess of every 'green' project you want to believe in ....... Barron's was attacked as gloomy doomsayers with no understanding of electrical market dynamics .....

Wed, 07/18/2012 - 10:10 | 2627831 Dr. Engali
Dr. Engali's picture

Delete. Damn cheap ass dell.

Wed, 07/18/2012 - 10:09 | 2627832 Dr. Engali
Dr. Engali's picture

Maybe it's just time to retire and call it quits. I'm sure there is an opening at Walmart to help suppliment your SSI.

Wed, 07/18/2012 - 10:35 | 2627919 Shizzmoney
Shizzmoney's picture

Tilson was recently spotted at a charity poker tournament.

Considering his fail positions, I would *drool* at the opportunity to play with this guy.  Fish = yum yum.

Wed, 07/18/2012 - 10:31 | 2627936 hellas4life
hellas4life's picture


If you spent 30 seconds looking at the 13-F rules you would understand that that with respect to the market value, votes, and other details of call options - you include the full value of the underlying - these are NOT market value of the options, but market value if you owned 100% of the underlying stock.


http://www.sec.gov/about/forms/form13f.pdf    Top of page 5

Wed, 07/18/2012 - 10:59 | 2628090 Tyler Durden
Tyler Durden's picture

Because sometime we understand that even our readers are slow, here is what was actually said in the post:

$125 million in long derivative equivalents

In the meantime, T2 is no more. But thanks for chiming in.

Wed, 07/18/2012 - 11:38 | 2628265 writingsonthewall
writingsonthewall's picture

He as so confident he posted the same mistake TWICE!

Wed, 07/18/2012 - 10:36 | 2627960 I am a Man I am...
I am a Man I am Forty's picture

This is the most horrific, brainless, pathetic fucking portfolio I have ever seen in my life, if you want to call it that.

Wed, 07/18/2012 - 11:01 | 2628105 azzhatter
azzhatter's picture

People pay him to manage that piece of shit?

Wed, 07/18/2012 - 11:37 | 2628261 writingsonthewall
writingsonthewall's picture

I can understand the fools who put their money in - they are just greedy.


...but why do the MSM insist on putting this twat on every five minutes to give us the 'value' off his advice and predictions?


They got rid of Merridith Whitney when her claims didn't come true immediately - but Tilson has hung around like a bad drain smell despite his total lack of ability.


Total bias - because he's a bull and she's a bear. The MSM don't like Bears - except the hairy bear kind...

Wed, 07/18/2012 - 11:34 | 2628251 Bartanist
Bartanist's picture

He thinks Goldman and Warren will protect him? ... lol.

Wed, 07/18/2012 - 13:12 | 2628799 DutchR
DutchR's picture

But does he make money himself, if so, hell, how do I setup a portfolio like that...

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