Saturday, July 3, 2010

Whitney Tilson June 2010 Letter to Investors

Dear Partner,

As the market continued its swoon, our fund bucked the trend last month and rose 4.2% net vs. -5.2% for the S&P 500, -3.4% for the Dow and -6.5% for the Nasdaq. Year to date, our fund is up 9.8% net vs. -6.6% for the S&P 500, -5.0% for the Dow and -6.7% for the Nasdaq.

Our long book actually rose modestly in June, thanks mainly to Berkshire Hathaway and Iridium rising 13.3% and 10.8%, respectively. A much smaller position in Liberty Acquisition Corp. warrants also jumped 36.0%. These gains were offset by declines in BP (down 32.8% in June, though our losses were less because we purchased it during the month; see discussion below), Winn Dixie (-13.9%), Microsoft (-10.8%), Echostar (-9.3%), dELiA*s (-7.5%), and General Growth Properties (-5.4%).

Our short book carried the day thanks to big losses among the homebuilders and for-profit education companies, Pacific Capital Bancorp (-55.6%), Barnes & Noble (-36.2%), Boyd Gaming (-35.5%), MBIA (-24.7%), and InterOil (the stock was down 9.9% so our puts did very well).


t2 June