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Tilson underperformance due to short selling


Guest kumar

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T2 Partners January Letter - Eating Some Humble Pie On Short Selling Mistakes

 

http://www.gurufocus.com/news.php?id=121052

 

Our fund declined 2.8% in January vs. gains of 2.4% for the S&P 500, .....shorting good businesses that are growing rapidly, even when their valuations appear extreme. Such open-ended situations, regardless of valuation, are very dangerous, so going forward we will avoid them entirely.....

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As a Buffett follower and admirer, it takes him too long  to learn this. Buffett stated that shorting is a bad business more than once.

First, it is so obvious that shorting a good business is dangerous.

Secondly, shorting even a bad business or a fraud is dangerous too. It is hard to get the timing right and so many forces are working again you. For the investor, the shorting position is just a fraction of his portfolio, however, for the fraudster, it is his life. He would make all his efforts to make the fraud going as long as possible.

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