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Now that my performance is back (I had a bad quarter in Q2 of last year -I was too bearish at the market top I guess), if I had a $100 for every time someone in the hedge fund business approached me to run money in "Consumer" land, I may not have as much $ as Prentice Capital has lost year to date, but I'd have plenty enough to fund the next leg of my firm's software development!

As most of you know, I used to be a PM in the hedge fund business, following Global Consumer. Michael Zimmerman, who runs Prentice, has been a competitor of mine since his days working for SAC Capital. Playing at the highest level, I think we both had pretty good runs since 1999. In the past few years, past performance has seemingly provided us both with the opportunity to start our own firms.

Past performance in this business is never a predictor of long term future returns, unfortunately. How hard you play the game doesn't always equate to winning it either. That said, I'm always up for a game, and I get up early.

Michael played tennis at Harvard, so I'd have to line up with my intern Jeff Dawson (Captain of Yale's 2008 Tennis team), if he wants to dance with me on clay. We hockey players are really slow when off the ice. I'd have to play 2 on 1 to even come close!

The market game is a different one however. There I'm happy to play head to head. I called the Morgan Stanley Retail Index out as a short in mid May (see attached, MVR Index), and it has since lost 24% of its value.

Looking at this article in section C1 of the WSJ, Jenny Strasburg has Prentice down -46% year to date, with "almost half of that drop happened during June as the value of the firm's stock and debt investments in retailers plummeted."

There is a winner and a loser in every trade. Mine, fortuitously, has been to leave the hedge fund community, take the short side on the industry, and build a global macro research process that is transparent and saves people money.

Maybe Prentice can become a client!

Play hard, and shake hands when it's over. This game is one of the best in the world.
KM