Every quarter, many money managers have to disclose what they've bought and sold. Their latest moves can shine a bright light on smart stock picks.
Today let's look at Whitney Tilson (a former Fool writer) and Glenn Tongue, who founded T2 Partners in 2004. Tilson has been dubbed "the best investor you've never heard of" and is known for his contrarianism, his dedication to value investing, and his respect for Warren Buffett and Charlie Munger.
Why should you care about T2 Partners' moves? Well, because while its performance has been volatile, its managers have posted some strong numbers in the past, and if you believe in the power of contrarian plays and value investing, they stand a good chance of doing so again. In their year-end letter to investors for 2011, Tilson and Tongue note that their total return since inception (in 1999) has been 114%, versus 29% for the S&P 500.
The reported T2 stock portfolio totaled about $345 million in value as of March 31, 2012, with 69 holdings.
So what does the latest T2 quarterly 13-F filing tell us? Here are a few interesting details:
New holdings include Vonage
T2 boosted its long position in Berkshire Hathaway, the diverse behemoth run by Warren Buffett, by using call options. Tilson and Tongue have frequently spoken highly of Buffett and Berkshire. In an April communication to investors, Tongue noted:
We value Berkshire stock and we think it's worth about $180,000 per share. We were buying Berkshire stock today very aggressively in the marketplace. It's got the most powerful balance sheet of any company in America and it's got earnings power that is growing very, very rapidly.
Tilson explained, "For more than 50 years, Buffett has proven beyond a shadow of a doubt that he can consistently: a) take $1 of cash and invest it to create far more than $1 of value; and b) pick stocks that go up and beat the market."
T2 reduced its stake in lots of companies, including, perhaps surprisingly, Apple
The company also decreased its stakes in Netflix
SanDisk recently reported disappointing earnings and warned of lowered expectations as well. Tilson is waiting for more information, to see if the company's problems are short-term or long-term. Some, like, my colleague Anders Bylund, though, see the stock as oversold, expecting various catalysts, such as the continuing explosive growth of smartphones, to fuel further growth for memory makers such as SanDisk.
Finally, T2 unloaded several companies, such as Seagate Technology
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.
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