The latest from Tilson Funds:
Our fund rose 1.9% in April vs. 3.0% for the S&P 500, 4.1% for the Dow and 3.4% for the Nasdaq. Year to date, it’s down 1.1% vs. up 9.1% for the S&P 500, 11.5% for the Dow and 8.6% for the Nasdaq.
On the long side, winners included Seagate (STX) (up 22.3%), AB InBev (BUD, Financial) (11.9%), and our long-dated call options on JC Penney (JCP, Financial), Kraft (KFT, Financial), Intel (INTC, Financial), and Johnson & Johnson (JNJ, Financial). Partially offsetting these gains were declines in The Howard Hughes Corp. (HHC)(-8.3%), Iridium (IRDM) warrants (-7.1%), and Grupo Prisa (-2.3%), which was the subject of a very favorable article in this past weekend’s Barron’s that highlights how cheap the stock is (see Appendix A).
On the short side, InterOil (IOC) dropped 14.8%, but Barnes & Noble (BKS, Financial), Gamestop (GME, Financial) and Ethan Allen (ETH, Financial) rose 19.6%, 14.0% and 10.0%, respectively.
Update on Microsoft and Berkshire Hathaway
Microsoft reported strong earnings two weeks ago, with 13% revenue growth and 24% EPS growth (excluding a one-time tax gain), yet the stock was down (of course – this is the Rodney Dangerfield of stocks). At April’s closing price of $25.92, it trades at 8.0x trailing EPS, net of cash, which is much too cheap for this exceptional, growing business.
Meanwhile, Buffett and Munger handled the Sokol affair beautifully last weekend and it is now completely behind Berkshire. They are razor sharp and at the top of their games, and Berkshire is doing extraordinarily well. The preliminary Q1 earnings released last Saturday appeared weak due to insurance losses in Japan and New Zealand, but occasional super-cat losses are essentially irrelevant to Berkshire’s long-term value, which is growing nicely. The A shares closed April at $124,750, and we peg intrinsic value in the $167, 000 range, so we think the stock is a safe, growing, 75-cent dollar.
Investor Presentation
We are unabashed admirers of Warren Buffett and Charlie Munger and also have a substantial investment in Berkshire Hathaway, so we always attend the company’s annual meeting in Omaha, which took place last Saturday. As we’ve done for a number of years, the following day we hosted an investor breakfast, during which we shared our latest Berkshire and Microsoft slides as well as a few on our firm, behavioral finance, the economy, what worries us, and our view of the markets.
T2PartnersInvestorPresentation-5-1-11
Our fund rose 1.9% in April vs. 3.0% for the S&P 500, 4.1% for the Dow and 3.4% for the Nasdaq. Year to date, it’s down 1.1% vs. up 9.1% for the S&P 500, 11.5% for the Dow and 8.6% for the Nasdaq.
On the long side, winners included Seagate (STX) (up 22.3%), AB InBev (BUD, Financial) (11.9%), and our long-dated call options on JC Penney (JCP, Financial), Kraft (KFT, Financial), Intel (INTC, Financial), and Johnson & Johnson (JNJ, Financial). Partially offsetting these gains were declines in The Howard Hughes Corp. (HHC)(-8.3%), Iridium (IRDM) warrants (-7.1%), and Grupo Prisa (-2.3%), which was the subject of a very favorable article in this past weekend’s Barron’s that highlights how cheap the stock is (see Appendix A).
On the short side, InterOil (IOC) dropped 14.8%, but Barnes & Noble (BKS, Financial), Gamestop (GME, Financial) and Ethan Allen (ETH, Financial) rose 19.6%, 14.0% and 10.0%, respectively.
Update on Microsoft and Berkshire Hathaway
Microsoft reported strong earnings two weeks ago, with 13% revenue growth and 24% EPS growth (excluding a one-time tax gain), yet the stock was down (of course – this is the Rodney Dangerfield of stocks). At April’s closing price of $25.92, it trades at 8.0x trailing EPS, net of cash, which is much too cheap for this exceptional, growing business.
Meanwhile, Buffett and Munger handled the Sokol affair beautifully last weekend and it is now completely behind Berkshire. They are razor sharp and at the top of their games, and Berkshire is doing extraordinarily well. The preliminary Q1 earnings released last Saturday appeared weak due to insurance losses in Japan and New Zealand, but occasional super-cat losses are essentially irrelevant to Berkshire’s long-term value, which is growing nicely. The A shares closed April at $124,750, and we peg intrinsic value in the $167, 000 range, so we think the stock is a safe, growing, 75-cent dollar.
Investor Presentation
We are unabashed admirers of Warren Buffett and Charlie Munger and also have a substantial investment in Berkshire Hathaway, so we always attend the company’s annual meeting in Omaha, which took place last Saturday. As we’ve done for a number of years, the following day we hosted an investor breakfast, during which we shared our latest Berkshire and Microsoft slides as well as a few on our firm, behavioral finance, the economy, what worries us, and our view of the markets.
T2PartnersInvestorPresentation-5-1-11
