Coho Capital Management LLC, an Oregon-based investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 81% was recorded by the fund for the year end 2020, outperforming its S&P 500 benchmark that delivered an 18.4% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Coho Capital Management, in their Q4 2020 Investor Letter, said that their Pershing Square Tontine Holdings, Ltd. (NYSE: PSTH) position was bought at an average price of $21.39, which turned out to be good since the stock price of the company is now playing between $29 -$30 a share. Pershing Square Tontine Holdings, Ltd. is a blank check company that currently has a $5.9 billion market cap. For the past 3 months, PSTH delivered a decent 24.21% return and settled at $29.91 per share at the closing of February 19th.

Here is what Coho Capital Management has to say about Pershing Square Tontine Holdings, Ltd. in their Q4 2020 investor letter:

"We acquired our Pershing Square shares, the Bill Ackman SPAC, through purchasing units (SPACs often go public with units including a common share and a fraction of a warrant). We bought at an average price of $21.39, slightly below the offering price of Pershing common stock at $20.00 when including the bundled one-ninth of a warrant (Pershing warrants started trading around $6.20), and two ninths per share additional warrants if held through merger $(2.07 altogether if held through merger and warrant prices hold). This provided us the opportunity to engage in nearly risk-free arbitrage on Bill Ackman finding a suitable candidate to take public. Of course, there is no guarantee that Ackman will find an attractive company to merge with his SPAC, potentially creating opportunity costs due to stranded capital. There is also the risk of combining with an enterprise with unappealing investment prospects. In such a case, we would not receive our two additional warrants but would be able to redeem our SPAC shares at $20.00 and sell our 1/9th of a warrant on the open market. In that scenario, we would be risking a 3% loss on our Pershing Square holdings (common stock and warrants combined). In short, if we don’t like the merger, 3% of our investment is as risk, where as if we like it, we were able to build the position in a risk-free manner. Given the dearth of investment opportunities as of late, as well as our immense respect for Bill Ackman’s investing acumen, we thought this was a suitable place to park our funds, creating the ultimate Dhando investment - heads I win, tails I don’t lose much."