CSX Corporation
Thesis
In May 2008, we were short CSX because the market was implying that the ROIC would be 15% in perpetuity, which we believed was unrealistic given the economic conditions and competition from trucking.
Did it work?
The short position lost approximately 603% over the ~18 years since the May 2008 pitch, meaning CSX shares rose dramatically rather than declining. The thesis dynamics were decisively invalidated: instead of being crushed by trucking competition and weak economics, CSX expanded margins and returns (aided by industry consolidation and precision scheduled railroading), effectively delivering the high ROIC the thesis deemed unrealistic. With the full horizon long elapsed and the position deeply underwater against the stated direction, this is a clear failure.