Home Business Sell In May And Go Away Might Just Work For Whitney Tilson

Sell In May And Go Away Might Just Work For Whitney Tilson

Whitney Tilson probably feels pretty good about himself for the first half of most years, and for good reason. His firm Kase Capital usually performs tremendously well in the first six months of the year, but the second half of most years, well, it’s another story.

A strange years-long trend for Whitney Tilson

Seems like an odd trend, but it’s one that’s held up since Tilson founded the firm. So does he go on vacation in the last six months of each year or what? We may never know. Tilson did not respond to a request for comment.

At any rate, Tilson still gets big props for ending some years ahead of the S&P 500 even after poor performance in the second half of most years. Overall, his firm, which has $98 million in assets under management, has also outperformed the index by 42% since its inception, according to data compiled from Kase’s investor letters. Not all hedge fund managers can say that.

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Also Kase Capital has often outperformed the S&P 500 on a yearly basis despite weak performance in the second half of the year, demonstrating just how well Tilson is able to do during the first halves.

whitney tilson

But think of how much more alpha he could generate if he did as well in the second half of most years as he typically does in all the first halves. Let's take a look at Whitney Tilson's performance since he founded Kase Capital—a story in charts.

Whitney Tilson underperformed in June

In June, the firm underperformed the S&P 500 Index by just a bit, and so far overall this year, Kase has underperformed the index. However, the firm has smashed the S&P 500 by quite a bit since its inception.

whitney tilson

A more through chart showing Whitney Tilson's monthly performance since Kase's inception is at the bottom of this post for those who are interested.

Kase Capital - tales of two halves

In fact, since Whitney Tilson started his firm in 1999, he outperformed the S&P 500 by a nice average of 133% in the first half of the years but underperformed the index by an average of 63% in the second half of them.

With the firm's solid overall performance, it is a little strange that Tilson has managed to do so well in most first halves of years and poorly in most second halves. This is a trend that has continued throughout the years. Of course there are exceptions, just like in anything in life, but overall, Kase Capital lags the S&P 500 from June to December in most years. We spoke to some experts on hedge fund performance, and they can find no mathematical reason for why this is happening. So is it the vacations in Kenya? The jury remains out!

whitney tilson

whitney tilson

whitney tilson

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