As discussed here, back in Jan. of 2012, CCI felt unreasonably high valuations for Lululemon (lulu )made this a good candidate a portion of the overall portfolio allocated to short positions.
It took awhile (OK..it took a long time), and some mental toughness (as the say the market can be irrational for longer than you can stay patient) but this week Lulu announced some disappointing sales. The stock finally came down enough for CCI to take about a 10% profit in this short position. Along the way, CCI actually enhanced that return by a few more percentage points with the sale of puts against this position (aka: the inverse of covered calls.)
A 10+% gain over a period where almost any "normal" long position would have been up 30+% does not sound that exciting. Of course, that is easy to say in hindsight. Who knew two years ago that the market would go straight up. It is nice to be able to get a win from a short position that was acting as a hedge for the long bias of the overall portfolio. A win/win!
Over the past two years, LULU has somewhat grown into its valuation, with its PE down to 25ish. There might be more room for it to fall further, but there are also now many stocks with high valuations. That means there might be other stocks that represent better short opportunities. Hence, CCI took these profits and will be looking for other short opportunities in the near future.