When at first you cover a soaring knife near its all time high, try, try again to catch it on the way down. And if you are Whitney Tilson, this is precisely what you do. The fund which is now down 25% YTD has lost 21.4% on its second round Netflix investment, something which Zero Hedge readers were on the other side of for the entire 50% pick in one month. But heaven forbid you learn a lesson: "A couple of weeks ago we sent you an article we published entitled “Why We’re Long Netflix and Short Green Mountain Coffee Roasters,” which is attached in Appendix B. Since then, both stocks have moved against us, making them even more attractive in our opinion." Lordy...
Our fund fell 0.6% in November vs. -0.2% for the S&P 500, +1.2% for the Dow and -2.3% for the Nasdaq. Year to date, it’s down 25.0% vs. +1.1% for the S&P 500, +6.7% for the Dow and -0.5% for the Nasdaq.
On the long side, our three winners of note were Grupo Prisa (B shares) (18.9%), Iridium (stock 11.8% and warrants 4.0%), and AB InBev (8.2%). These gains were more than offset by Netflix (-21.4%), Sears Canada (-16.7%), Citigroup (-13.0%), Goldman Sachs (-12.5%), and dELiA*s (-10.7%).
Our short book did well during the month and is now in the black on the year (meaning that all of our losses are on the long side). Our biggest winners in November were Career Education (-56.2%), Green Mountain Coffee Roasters (-19.4%), Nokia (-14.0%), Lululemon (-12.0%), ITT Educational Services (-11.3%), and Salesforce.com (-11.1%). Our only loser of note was InterOil (+15.1%).
In the rest of our letter (attached), we discuss Iridium, Grupo Prisa, Netflix, Green Mountain Coffee Roasters, and InterOil.
Happy holidays and new year!