I am somewhat surprised by this because I thought he was less than 50% net long. (Correction: Tilson made changes to the fund in August which resulted in the fund being 70% net long). Covering his NFLX short may have hurt a little (especially after today’s after-hours news) but a 70% net long position should have outperformed the market. I am also a little suprised by his comment about placing weight on future value over the present. I don’t think Graham would have viewed valuations quite the same way:
Our fund declined 13.7% in August vs. -5.4% for the S&P 500, -4.0% for the Dow and (minus) 6.4% for the Nasdaq. Year to date, it’s down 22.1% vs. -1.8% for the S&P 500, +2.1% for the Dow and -2.2% for the Nasdaq.
On the long side, our portfolio got clobbered across the board despite generally good company-specific news regarding our major holdings (discussed below). Amidst a tumultuous month in the markets, investors dumped stocks that were even slightly illiquid, or that are valued primarily on future, rather than current, profits – both traits that characterize many positions in our fund.