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Of Whitney Tilson's $345MM In AUM, $104MM Is In Call Options, $24MM Is In Warrants

Tyler Durden's picture


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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Tue, 05/15/2012 - 15:41 | Link to Comment LongSoupLine
LongSoupLine's picture

Even the most amateur of day traders are calling him an idiot.

Tue, 05/15/2012 - 15:45 | Link to Comment Divided States ...
Divided States of America's picture

Honestly, Tyler, anything to do with Tilson shouldnt get any attention here. We already know he's nothing more than a glorified front runner.

Tue, 05/15/2012 - 16:03 | Link to Comment NotApplicable
NotApplicable's picture

Yes, but now we know just how glorified.

Tue, 05/15/2012 - 16:08 | Link to Comment ihedgemyhedges
ihedgemyhedges's picture

How's that JC Penney call working for Tilson right now???????????????  Long the common and a call.  TIMBERRRRRRRRRRR!!!!!!!!!!!!!!!

Tue, 05/15/2012 - 16:27 | Link to Comment redpill
redpill's picture

I find it utterly bewildering that people are paying this fund to buy Berk for them.

Tue, 05/15/2012 - 18:41 | Link to Comment rajat_bhatia
rajat_bhatia's picture

"Tilson is a disciple of the Graham-Dodd-Buffett-Munger school of value investing. "


 ....was one of five investors included in SmartMoney’s 2006 Power 30, was named by Institutional Investor in 2007 as one of 20 Rising Stars, has appeared dozens times on CNBC, Bloomberg TV and Fox Business Network, was on the cover of the July 2007 Kiplinger’s, has been profiled by the Wall Street Journal and the Washington Post, and has spoken widely on value investing and behavioral finance....

.....He earned an MBA with High Distinction from Harvard Business School in 1994, where he was elected a Baker Scholar (top 5% of class)......


tells u so much about so many things

Tue, 05/15/2012 - 20:17 | Link to Comment Freddie
Freddie's picture

Did he get into Harvard on a native American preference like that Elizabeth Warren running for Teddy Kennedy's seat?

Tue, 05/15/2012 - 16:36 | Link to Comment El Oregonian
El Oregonian's picture

The guy's a smuck....

Tue, 05/15/2012 - 15:40 | Link to Comment midgetrannyporn
midgetrannyporn's picture

brk omg lol hahaha

Tue, 05/15/2012 - 15:43 | Link to Comment ACP
ACP's picture

That just made my day.

Tue, 05/15/2012 - 15:43 | Link to Comment CvlDobd
CvlDobd's picture

Where are the Barnes and Noble insider info shares?

Tue, 05/15/2012 - 15:54 | Link to Comment Roy T
Roy T's picture

I believe he said he was short Barnes and Noble up to like a week before it popped, and, by some miracle, went long the day or two before the partnership announcement.  I may have my days off by a couple of days.

Tue, 05/15/2012 - 15:56 | Link to Comment CvlDobd
CvlDobd's picture

Your dates are close enough and that's what I'm referring to.

Tue, 05/15/2012 - 16:02 | Link to Comment Roy T
Roy T's picture

These are positions as of 3/31.  The Barnes & Noble and Microsoft partnership was announced in late April and short positions are not shown

Tue, 05/15/2012 - 17:24 | Link to Comment CvlDobd
CvlDobd's picture

I meant it more tongue in cheek but your point is well taken, thanks.

Tue, 05/15/2012 - 15:43 | Link to Comment ebworthen
ebworthen's picture

"I'm putting most of it on double-sixes for the next dice roll.  Waitress!  Double scotch please."


Tue, 05/15/2012 - 15:49 | Link to Comment ihedgemyhedges
ihedgemyhedges's picture

We bones throwers refer to that call as "midnight"............double sixes and "boxcars" is for amateurs..........

And always call a "horn high midnight" if you throw back to back ace/deuce.  No charge for the advice.....

Tue, 05/15/2012 - 16:06 | Link to Comment NotApplicable
NotApplicable's picture


Didn't they tell you that is supposed to be a guild secret?

Tue, 05/15/2012 - 15:44 | Link to Comment Dr. Engali
Dr. Engali's picture

Wow! This guy is an embarrassment. Somebody shoot his positions and put him out of his misery.

Tue, 05/15/2012 - 16:08 | Link to Comment NotApplicable
NotApplicable's picture

What are you talking about? I find this highly entertaining.

Tue, 05/15/2012 - 15:44 | Link to Comment Sam Clemons
Sam Clemons's picture

Is the Government going to investigate his trades and provide regulation (not enforce) to make sure he doesn't lose his own money too?

If we can just regulate away risk, the world will be so perfect besides the fact that there won't be rewards. 

Tue, 05/15/2012 - 15:44 | Link to Comment Surly Bear
Surly Bear's picture

All he needs now are some puts and he is covered both ways....

Tue, 05/15/2012 - 15:46 | Link to Comment Roy T
Roy T's picture

Totally on board, how this guy get air time almost EVERY DAY is a mystery to me.  My favorite recent Tilson moment was when he said "Thank You Mr. Market" when NFLX hit 85.  He bought some more under thought the market was giving him a gift.  Oops.


Tue, 05/15/2012 - 15:46 | Link to Comment LetThemEatRand
LetThemEatRand's picture

Yet he makes a lot more than most of us.  Who is laughing now?  The entire system is a scam.  

Tue, 05/15/2012 - 15:47 | Link to Comment 5880
5880's picture

Theta and Vega in calls, nice

Tue, 05/15/2012 - 15:48 | Link to Comment Venerability
Venerability's picture

Oh, No! 345?

And this is Mr. Obama's example of a "job creator?"

(To be fair, I think the Obama-ites were misled and had no idea about the message they were sending.)

Please read my latest multi-part Stock Talk at Seeking Alpha.

I mean every word of it.

Some have gone way too far. And it is they who have the most - actually , all - to lose, since the Rest of US have only bread crumbs left, anyway.

Markets or Computer Games?

And, which, Dear DOGs, are easier to hack into by every Organized Crime group in the world, plus any rogue country or political group which wants to make a point?

It's not only that Real Markets which welcome Real People are fair and just and moral, compared to fixed Computer Games.

It's that they are far, far safer.

Because the original Fixers often get Fixed themselves.


Tue, 05/15/2012 - 15:50 | Link to Comment tinhats
tinhats's picture

You know, short positions aren't disclosed on 13F filings. Could be that he has another leg to the position (ex. short BRK.B stock) so that he is simply long volatility in the underlying. He could even be massively short the stock and has the calls as a hedge. Who knows. But either way this article is pretty misleading.

Tue, 05/15/2012 - 15:57 | Link to Comment Roy T
Roy T's picture

Possible, but I doubt it.  As one of the few CNBC watchers, I know how much Tilson loves Buffett and Berkshire.  He certainly says it enough. 

Tue, 05/15/2012 - 16:10 | Link to Comment NotApplicable
NotApplicable's picture

Hello??? He's the poster-boy for CNBC contributers, not someone with intelligence!

Tue, 05/15/2012 - 15:49 | Link to Comment i love cholas
i love cholas's picture

Tyler why the hard-on for Whitney? I'm late to the party. He doesn't manage any of my money so I don't care. 

Tue, 05/15/2012 - 18:33 | Link to Comment LudwigVon
LudwigVon's picture



  • Continuously discrediting the statist shills paid to mislead may inform even one more of the ones "who must fight" ...likely many more


  • Documenting loser shills and losing strategies in a timely manner yeilds truth-capital to draw upon in the future
Tue, 05/15/2012 - 15:55 | Link to Comment Cone of Uncertainty
Cone of Uncertainty's picture

Whitney Tilson: If it were raining pussies, he'd get hit in the head with a dick.

Tue, 05/15/2012 - 16:08 | Link to Comment Dr. Engali
Dr. Engali's picture

+ 69 That was damn funny :>

Tue, 05/15/2012 - 16:00 | Link to Comment bobola
bobola's picture

So, I would have to get cable TV to see him in action, then...???

Tue, 05/15/2012 - 16:10 | Link to Comment Pairadimes
Pairadimes's picture

Just one of a legion of naked emperors running around in the world of fictional finance.

Tue, 05/15/2012 - 16:12 | Link to Comment Scalaris
Scalaris's picture


If anyone's interested I'm setting up a hedge fund.

Going all in on penny stocks, J.C. Penney, RadioShack, anything with solar panels, Zynga, and of course Group On. Facebook will obviously be added upon admission.

Tue, 05/15/2012 - 16:16 | Link to Comment Diesel Seven
Diesel Seven's picture

Sounds good! Don't forget TVIX, but only if it is trading at a price 20% or greater to NAV . . . Sears too . . I hear K-Mart is doing well . . .

Tue, 05/15/2012 - 17:19 | Link to Comment jamezelle
jamezelle's picture

can i have you ticker so i can short it early lol

Tue, 05/15/2012 - 17:26 | Link to Comment Scalaris
Scalaris's picture


Tue, 05/15/2012 - 16:14 | Link to Comment Diesel Seven
Diesel Seven's picture

Wait until he decides to play volatility . . . might start buying UVXY calls . . .

Tue, 05/15/2012 - 16:15 | Link to Comment stormsailor
stormsailor's picture

uncertainty, hahahahhahaahhahahahahahah.  my sides are hurting.  +100

Tue, 05/15/2012 - 16:32 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

there is no way this guy is making money

Tue, 05/15/2012 - 16:44 | Link to Comment Matt
Matt's picture

... for his clients. I'm sure he himself is doing just fine, but it's nice of you to care.

Tue, 05/15/2012 - 16:47 | Link to Comment innsbrooklad
innsbrooklad's picture

Tilson is a legend in his own mind....

Tue, 05/15/2012 - 17:04 | Link to Comment Augustus
Augustus's picture

The reason he fell in line with the Omaha Orangutan on tax increases was in the hope that he can become as close to the Obamacons as Corzine the bundler.  Get an appointment.  His fund will be finished in six more months.

Tue, 05/15/2012 - 17:53 | Link to Comment prodigious_idea
prodigious_idea's picture

Spare a thought for how his donations to childhood education might suffer as a result of his financial missteps.

Tue, 05/15/2012 - 19:26 | Link to Comment SwingForce
SwingForce's picture

TARP warrants on AIG & JPM? And I can't believe Irridium is still alive, how about Clearwire now that Light sqd is fkd? A convertible preferred is like a bond w/ warrants, chek out what RCWhalen is doing w/ Tangent.

Tue, 05/15/2012 - 19:36 | Link to Comment SwingForce
SwingForce's picture

Alexander & Baldwin????? Didn't they make Annuities & Pianos? I thought they went bust in the 80's.

Please Tyler, any more info on exp / strike on these calls? These idiots go years usually, just wondering...

Tue, 05/15/2012 - 20:44 | Link to Comment long-shorty
long-shorty's picture

Well, at least he doesn't have to worry about selling those JCP calls that are now bid --- / ask 0.05.

Wed, 05/16/2012 - 12:07 | Link to Comment virgilcaine
virgilcaine's picture

I'm betting this fellow will not last the year. He's down 80 % YOY on Nflx and JCp alone.

Wed, 05/16/2012 - 14:03 | Link to Comment Hustler Elite
Hustler Elite's picture

"Tilson is a disciple of the Graham-Dodd-Buffett-Munger school of value investing. "

I would beg to differ, some of the above mentioned investors wouldn't buy some of the piles of hot garbage which he is currently holding.

Mon, 06/04/2012 - 16:29 | Link to Comment Godisanhftbot
Godisanhftbot's picture

its all opm, so what does he have to lose.


another pimp is all.

Mon, 06/04/2012 - 17:40 | Link to Comment gissaus
gissaus's picture

this has to be notional exposure of the option. No way he can be long $70+MM berkshire calls in premium terms...

Mon, 06/04/2012 - 18:01 | Link to Comment Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

He hasn't read Fooled By Randomness yet. Too busy, what with being a TV reality show character and with investing as a hobby.

Wed, 06/06/2012 - 10:43 | Link to Comment riskarb
riskarb's picture

Tilson is retarded, but there is no mention of the single-name deltas.... he could be in BRK-B 50C, for example. In reality, he may be North of 90D per name and therefore have virtually zero gamma (and by extension, theta). Tyler, do we know the strikes and tenors of these positions?

Wed, 06/06/2012 - 10:59 | Link to Comment bonkthegrups
bonkthegrups's picture

The author has no idea what he's talking about.  What an embarrassment.

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.

Seriously man, look it up:    Top of page 5:

"The Manager must give the entries in Columns 1 through 5 and in Columns 7 and 8 of the Information Table, however, in terms of the securities underlying the options, not the options themselves."

If you don't believe me maybe some grade 2 math will help:

From the 13-F, that $76.3M in BRK options has beside it the number of shares they cover: 939,800.  $76.3M divided by 939,800 = $81.15, which is exactly where BRK closed on March 31.  The shares are worth $81.15 not the options.

For example if these are December $80 call options, they trade for around $4.50, which would be about $4M - a 2% weighting on a $200M fund.

Geesh man if you're going to critcize someone for "not having a clue" don't embarrass yourself be showing how ignorant you are in the process. 


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