Bronte Capital has racked up one of the most impressive performances of its hedge fund peer group over the past six years. From inception during the first-half of 2009, to the beginning of July 2014, when Bronte Capital pooled its funds, the group’s separately managed accounts produced an annualized return of 31.5% and cumulative return of 293.2% after fees. Bronte Capital: The year of the short 2013 was the year of the short. At the beginning of the year, the market held large short positions in high-profile short targets such as Herbalife Ltd. (NYSE:HLF), Tesla, and Netflix, Inc. (NASDAQ:NFLX). At the end of 2013, Bronte Capital declared in its year-end letter to investors: "...we are now seeing people pile into worthless stocks on worthless analysis and being fooled by momentum into believing they are geniuses. This will end sometime and short-sellers will again have their day. We look forward to making real alpha on the short-book again. We are now getting long a few high-short interest names though as a hedge against a further generalized squeeze. We are rigorous about investigating the short thesis. Only one name springs to mind – Blue Nile. Blue Nile is an online jeweler and a very fine company sporting a very high valuation. The short-thesis is essentially a valuation thesis. We think the short-thesis is only marginally wrong – but the high short-interest skews the trade in our favor. Still this sort of “trade” warrants only a single digit percentage of our portfolio. It’s just a little “spivvy” for us. Still it’s not a bad place to be. We are buying high-quality companies at the wrong price but as a necessary hedge against crappy companies shorted at even more egregious prices. We stress however that typically the long portfolio stands on its own merits." -- Bronte Capital year-end 2013 letter to investors of its... More