2013 Was Most Difficult Year Ever For Short Sellers: Lakewood

Lakewood Capital Management LP earned a net profit of 6.6% for 4Q2013 and 13.0% for 2013, falling short of the fund’s goal of 15% annualized net returns across investment cycles. At the end of the year, the fund’s long exposure was 82.5% and its short exposure was 35.1%. Daily volatility was 4.6% for the year, less than half the S&P 500’s daily volatility of 11.0%, and daily beta was just 0.27, but strong gains from long positions were seriously undercut by losses from the fund’s short positions.

Stocks doubled and tripled without substantive...

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