Whitney Tilson Resource Page

“What’s both fascinating and challenging about investing is that the changing nature of business and finance means you can never have it all figured out.” — Whitney Tilson

Whitney Tilson: Background & bioLumber Liquidators LL Tesla Whitney Tilson K12 Questcor Pharmaceuticals QCOR

Whitney Tilson is the founder and Managing Partner of Kase Capital Management, which manages three value-oriented hedge funds.

Mr. Tilson is also the co-founder of Value Investor Insight, an investment newsletter, and the Value Investing Congress, a biannual investment conference. Mr. Tilson has co-authored two books, The Art of Value Investing: How the World’s Best Investors Beat the Market(2013) and More Mortgage Meltdown: 6 Ways to Profit in These Bad Times (2009), was one of the authors of Poor Charlie’s Almanack, the definitive book on Berkshire Hathaway Vice Chairman Charlie Munger, and has written for Forbes, the Financial Times, Kiplinger’s, theMotley Fool and TheStreet.com. He is a CNBC Contributor, was featured in a 60 Minutes segment in December 2008 about the housing crisis that won an Emmy, and has spoken widely on value investing and behavioral finance.

Prior to launching his investment career in 1999, Mr. Tilson spent five years working with Harvard Business School Professor Michael E. Porter studying the competitiveness of inner cities and inner-city-based companies nationwide. He and Professor Porter founded the Initiative for a Competitive Inner City, of which Mr. Tilson was Executive Director. Mr. Tilson also led the effort to create ICV Partners, a national for-profit private equity fund focused on minority-owned and inner-city businesses that has raised nearly $500 million.

Before business school, Mr. Tilson was a founding member of Teach for America, the national teacher corps, and then spent two years as a consultant at The Boston Consulting Group.

Mr. Tilson received an MBA with High Distinction from the Harvard Business School, where he was elected a Baker Scholar (top 5% of class), and graduated magna cum laude from Harvard College, with a bachelor’s degree in Government.

Mr. Tilson’s parents are both educators and he spent much of his childhood in Tanzania and Nicaragua. Consequently, Mr. Tilson is involved with a number of charities focused on education reform and Africa. For his philanthropic work, he received the 2008 John C. Whitehead Social Enterprise Award from the Harvard Business School Club of Greater New York. He is also a member of the Young Presidents’ Organization. Mr. Tilson lives in Manhattan with his wife and three daughters.

Whitney Tilson: Investment philosophy

Whitney tilson’s investment strategy I have mostly from the interview I conducted with him and other online resources including previous interviews he has conducted:

We draw from every different style. Value investing is simply buying a stock at a significant discount to its intrinsic value. The closest classic value stock we own which is almost a net net is a small retailer named Delias which is trading close to cash. We also own Berkshire Hathaway which has $186 billion market cap which is more of a growth at a reasonable price. We also own General Growth Properties; the company is in bankruptcy which I would classify as a special situation. We try to find lots of different value opportunities and we try to keep an open mind.

Tilson also has a lot of experience in the restaurant sector and stated that we “have made a fortune over the years investing in McDonalds, Denny’s, Yum Brands, Jack in the Box, CKE Restaurants and others.” However, Tilson does not limit himself to any particular sector. He has invested in distressed debt such as GGP, in contrarian situations such as British Petroleum (Disclosure: As of November 24th 2010 the author is long BP). He also has a short book which as of November 2010 includes Opentable which provides restaurants with computerized reservation systems, and St. Joe which is a property developer in Florida. In addition, Tilson has invested in special situations including GrupoPrisa/Liberty Acquisition. Tilson seems to be a generalist who takes a fundamentalist approach that is not limited to any particular market cap or value style. He buys when he sees values and employs extensive fundamental research as opposed to relying on plain metrics such as P/E, or P/B, FCF. It makes no sense employing these metrics  in special situations or distress investing such as General Growth Properties.

Whitney Tilson also stated that he became obsessed with the housing market as he investigated it during the bubble years. He therefore was able to find companies that would be materially affected by a downturn in the market. Tilson stated in our interview that he is a “today we are 75% bottoms-up and 25% top-down (investors)”.

Whitney Tilson: Books

Whitney Tilson: Presentations

Whitney Tilson: Quotes

“You must have the patience and conviction to stick with what is, by definition, an unpopular bet.”

“Value investors are contrarians at heart, buying what’s out of favor and selling that which the market loves.”

“To succeed as a contrarian you must recognize what the crowd believes, have concrete justification for why the majority is wrong, and have the patience and conviction to stick with what is, by definition, an unpopular bet.”

“The Wall Street trading mentality and pressure on money managers to put up strong quarterly or even monthly performance numbers can make it hard for them to own obviously beaten-down stocks.”

“Even the world’s greatest companies encounter problems or otherwise fall out of favor. Correctly differentiating between those suffering temporary rather than permanent issues is the key to success here.”

“When growth companies stumble, growth and momentum investors often sell indiscriminately, which can be a great opportunity for value investors if – and it’s a big if – the high growth resumes or the stock falls so much that it’s a bargain even at lower growth levels.”

“Given the research showing that a significant majority of acquisitions are value destroyers for the buyers, it’s remarkable how frequently investors get excited about roll-up stories or big acquisitions.”

Whitney Tilson: Articles

Whitney Tilson: Video

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