Whitney Tilson’s fund, T2 Partners, is up 12.3% this year, and performing a good deal better than many rival hedge funds.
In a letter to investors written recently and posted at Marketfolly (and embedded below), Tilson writes that T2 experienced losses of 1.5% this August, losses that are about on par with the rest of the industry, which was down on average 0.5% last month.
Three of his shorts are interesting plays to look at. They are Interoil, the oil company Shia Lebouf may or may not have pumped for his buddies at John Thomas Financial, Ambac, and Lululemon.
Tilson’s letter delivers an opus on why he thinks Interoil is a good short (it starts at the bottom of page 2). He seems to be responding to the speculation that Tilson might have changed his views on the stock following his reporting a long stake in Interoil in his most recent 13-F.
The best lines:
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).
Ambac, a bond insurance company, was down 34.6% last month. Tilson predicts, like many others, that Ambac is about to file for bankruptcy.
Earlier in the summer, the company was warned that it may soon have to file for bankruptcy. The company’s stock plunged to $0.51 from over $90 three years ago.
The Lululemon short is interesting because he doesn’t say much about it and because today Lululemon announced that it had beat earnings expectations and is up sharply since the news.
Read the letter: