Grab a cup of coffee, find a comfortable chair, lean back, and prepare to be entertained: here is Whitney Tilson's Mea Culpa for "returning" -24.9% in 2011.
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Key soundbites:
- "There is no way to put a positive spin on 2011: our fund had a dreadful year, its worst ever on both an absolute and relative basis. While we made a bit of money on the short side, nearly all of our longs entering the year did very poorly and, compounding this, most of the investment decisions we made during the year subtracted value. It has been an extremely frustrating – and humbling – experience."...
- "We struggle with how bad of a grade to give ourselves for 2011 because in some ways it’s too early to tell."...
- "Why not an F? Because an F is reserved for blowing up – and we didn’t....Instead, we stayed calm, added to our favorite positions, and recouped some of our losses in the fourth quarter."...
- "We believe in eating our own cooking – we have a higher percentage of our net worths in our funds than anyone, by far – so it goes without saying that no-one has lost more money or feels worse about our fund’s recent performance than we do."...
- "In the case of most of our poorly performing stocks of 2011... we held or bought more."...
- "We feel badly about our recent performance and obviously wish we’d done many things differently, but we are not at all discouraged, as we’ve been through this before. If you look at our performance table at the beginning of this letter, you will see that we’ve lost more money, much faster, on two other occasions."...
- "Beyond the financial impact, we have our reputations on the line, take pride in what we do, and know most of our investors personally, so we feel like we’ve let our friends and families down – a truly lousy feeling."...
- "In 2011, we had no material winners other than J.C. Penney – but we don’t think this is a permanent state of affairs."...
- "Finally, and most importantly, as noted above, we think nearly all of our losses last year are temporary".
Odd - no mention of the fund's AUM over time...
Like we said - pure humor. And with that any last redemption request gets faxed in and Tilson's own cooking is the only cooking he will get to eat. Luckily, Tilson will always be invited on CNBC's Fast Money. And there is that "value investor" (act now - 80% off special only if you purchase in the next 10 minutes) conference thing...
And just because people need to know what to be long:
Our 10 largest short positions as of the end of 2011 were (in alphabetical order): Ethan Allen, First Solar, Garmin, Green Mountain Coffee Roasters (see Appendix C), InterOil (discussed in our July and November letters1), ITT Educational Services, Lululemon Athletica, Nokia, PVH Corp., and Salesforce.com (discussed in our July letter).
We are creating the inverse "Tilson shorts" long ETF as we type...