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Managing Losses With A Portfolio Pro

These volatile market are hitting investors across the board. Even the most savvy traders are feeling the heat including hedge fund manager Whitney Tilson.

In fact, Tilson, who is founder of T2 Partners and a CNBC Contributor is facing his fund’s second-worst month ever.

How’s he managing the losses?

First and foremost, he’s not panicking.

Tilson is a value investor, that is, an investor who combs the market looking for stocks that he thinks are too cheap.

And as along as the pullback doesn’t shake Tilson’s conviction in his thesis, he selectively adds to positions.

In other words, if you're looking to cut losses, you're not trading like a pro. As Warren Buffett often says, be greedy when others are fearful.

"We still think both Citi, at less than half of tangible book, and Goldman Sachs at 70% of tangible book, are screaming buys. We've added," Tilson tells us.

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However, he also says, it's important to trade with discipline and take profits during a rally.

That's something Tilson did earlier in the year. "Netflix almost doubled in the first 6 months of the year and we sold out of a lot of that position."

However, he adds now, "as other investors flee, we're willing to wade in. That's where the bargains are. We've started adding to our Netflix position, again."

Read More:

Click here to go to: Scary Market Presents Huge Opportunity: Tilson


Posted by CNBC's Lee Brodie




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Trader disclosure: On June 4, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman is long AAPL; Karen Finerman is long JPM; Karen Finerman is long BAC; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long GRPN PUTS AND PUT SPREADS; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Tim Seymour is long BAC; Tim Seymour is long INTC; Dan Nathan is long AAPL JUNE 550/520 Put Spread; Dan Nathan is long BAC JULY 6/5 PUT SPREAD; Dan Nathan is long MS JAN 10/5 1X2 PUT SPREAD; Dan Nathan is long RIMM JAN 20/25 CALL SPREAD; Dan Nathan is long CHK JAN 12.50/7.50 PUT SPREAD; Dan Nathan is long CHK JAN 10/5 1X2 PUT SPREAD; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU

For Ron Insana
Nothing to Disclose

For Scott Nations
Scott Nations is long C
Scott Nations is long JPM
Scott Nations is long BAC
Scott Nations is long SPY

For Amelia Bourdeau
Nothing to Disclose

For Whitney Tilson
Whitney Tilson is long BRKA
Whitney Tilson is long JCP
Whitney Tilson is long DELL
Whitney Tilson is long JPM
Whitney Tilson is long NFLX
Whitney Tilson is long BKS
Whitney Tilson is long C
Whitney Tilson is long GS
Whitney Tilson is long SNDK
Whitney Tilson is long AIG
Whitney Tilson is long IRDM
Whitney Tilson is long PBY

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