Monday, August 2, 2010

T2 Partners July Letter

Dear Partner,

Our fund gained 3.5% net in July vs. 7.0% for the S&P 500, 7.2% for the Dow and 7.0% for the Nasdaq. Year to date, our fund is up 13.6% net vs. -0.1% for the S&P 500, 1.9% for the Dow and -0.2% for the Nasdaq.

Given our conservative positioning, our fund performed in line with what we’d expect: our long book was up with the market, but our short book dampened our returns somewhat. On the long side, winners of note included BP (up 33.2%), Goldman Sachs (14.9%), Resource America (13.0%), American Express (12.4%), AB InBev (10.5%), CIT (7.4%), and General Growth Properties (5.0%), slightly offset by Berkshire Hathaway (-2.5%).

On the short side, we profited handsomely from VistaPrint (-30.4%) and Gentiva Health Services (-23.6%), but these gains were more than offset by losses on MBIA (up 54.7%) and InterOil (35.1%).

Three of our Favorite Stocks and Thoughts on Time Horizons
Earlier this month we shared with you the attached presentation on three of our favorite stocks, AB InBev, Microsoft and BP. We discuss each of these investments further below, including highlighting the very different time horizons we have for each of these investments and how it affects our analysis.

T2-July 10

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