Whitney Tilson has one message for all the haters after his short-heavy portfolio lost some ground at the end of 2010: Remember what happened three years ago.
“It might interest you to know that the last time we suffered such big losses in our short book and felt like covering everything was in late 2007. But after evaluating each position at that time, we weren’t willing to cover things like MBIA, Ambac and Lehman Brothers around $70, or AlliedCapital and Farmer Mac around $30 – and thank goodness we didn’t!” Tilson writes in his latest investment letter (via Insider Monkey).
Tilson’s current short book includes several positions he has discussed very publicly. He is shorting Netflix because its business model can’t compete in the streaming era. Interoil he said is basically a scam and has been short since last summer.
Tilson is also short the housing market via St Joe, with David Einhorn, and homebuilder’s ETFs.
Tilson is shorting the housing market through various stocks and ETFs.
He writes: 'The jump in interest rates largely reflects growing optimism about an economic recovery, but also creates a headwind for the housing market, which was already feeble and on government life support. The housing market has worsened recently, with sales and prices weakening.'
Tilson has been bearish on InterOil since last summer when the company was valued at $2.9 billion.
He said in September: 'We've never had more conviction and Interoil is currently our largest bearish position. After more than a decade of drilling, InterOil has no proven or even probable reserves - just a lot of hype and unfulfilled promises (and more than 200 press releases).'
Tilson seems to be joining Steve Eisman again, who launched an assault of for-profit education stocks this fall. The thesis is that Washington will crack down on loan structures and rising employment will cut into enrollment.