One Year Later: You Can Still Make Money But "It's Nowhere Near as Easy," Top Manager Says

Two who did were Whitney Tilson and Glenn Tongue of T2 Partners, which has about $150 million of assets in both hedge funds and mutual funds. Thanks to big bets on financials like Wells Fargo and American Express, and cyclicals like Huntsman, their long-only Tilson Focus Fund is up 152% in the past year, top ranked in its category, according to Morningstar. Year-to-date, the fund is up 13.7%, also number one in its category. The fund also scores high rankings on the 3- and 5-year timeframes, as does the Tilson Dividend Fund.

I caught up with Tongue this week for a quick look back at the past year and, more importantly, to get his views on the opportunities going forward.

"The key challenge a year ago was to be invested. If you had the discipline to stay invested you generally did pretty well," Tongue says. "It's nowhere near as easy now. [You] have to be quite a bit more selective today. We don't think just being invested is the recipe for success this year."

As value (vs. momentum) investors, it's not surprising Tongue and Tilson are less optimistic today after the big rally. "The value of franchises have not gone up nearly as quickly as the prices," Tongue says.

As a result, T2 Partners is focused more on defensive, big-cap names that Tongue believes are at least 20% undervalued on a fundamental basis, including Berkshire Hathaway, Microsoft, Kraft and Wal-Mart.

Check the accompanying video to hear Tongue's rationale for investing in these behemoths, as well as the lesser-known names he believes can provide outsized returns in the coming year.