Home Value Investing How To Launch A Hedge Fund With Whitney Tilson! – VALUETALKS

How To Launch A Hedge Fund With Whitney Tilson! – VALUETALKS

Good Morning Listeners,

Today is a very special episode with Whitney Tilson, the founder of Kase Learning. We talk about the early days of running a hedge fund with no prior experience, why he shut down Kase Capital, and why he launched Kase Learning. Whitney is a graduate of Harvard College and Harvard Business School. He previously managed T2 Partners and Kase Capital. Whitney also coauthored several books such as “The Art of Value Investing: How the World’s Best Investors Beat the Market” and “More Mortgage Meltdown: 6 Ways to Profit in These Bad Times”, “Poor Charlie’s Almanack”.

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Below is an excerpt about how Whitney started his fund.

“It was back in late 1998, late 90s in general, for the first time in my life, I had 10,000 bucks in my bank account. Necessity being the mother of invention, I wanted to know what to do with it. This was a few years after I graduated Harvard Business School, my wife was working in the city as a lawyer and we finally paid off all my debts and had a little bit of money in the bank. I remember calling Bill Ackman, who was a friend of mine from college, and asked him about investing. He said read all of Warren Buffet’s letters and that is everything you need to know. So I did and keep in mind the 90s was a decade long in a very long bull market and was a great time to be in stocks. Every stock I picked one up and said this is great, I am God’s gift to investing. In hindsight I was more of a bull market genius. It is sort of ironic because I see a lot of them today, 9 years into this bull market. After a couple of years making a lot of money, I remember the biggest winner was AOL back in the early days and made 6 times my money in that one year. That really convinced me that I was God’s gift to investing. In late 1998, the idea just struck me that I should follow in my friend, Bill Ackman’s footsteps, and start my own hedge fund. He at that point was managing his original fund, Gotham Partners and Bill and his partner, David Berkowitz, had grown from 3 million to maybe 500 million under management and were doing incredibly well. That was an inspiration for me as well. So I decided to hang out my shingle as the world’s smallest hedge fund about 6 weeks later. So 6 weeks after I decided to start my own fund, I had opened my doors. I had 3 investors and 1.1 million dollars under management of my own money, my parents, and my in-laws and that is how I started almost 20 years ago.“

1:14 – What led you down the hedge fund industry and why did you start your own fund?

3:29 – What were the early days like when you were launching your hedge fund?

10:49 – Did you have any mentors to learn business from in the early days?

12:01 – What lessons did you learn running your own hedge fund?

20:45 – How should you balance your time early on in your career and where should you spend it?

22:54 – What did you enjoy most about running your own fund?

24:27 – You recently closed down your fund, can you tell me what happened?

38:41 – What led to creating Kase Learning?

48:12 – Can you talk about the life lesson aspect of the boot camp?

54:08 – Can you tell me more about your experience with sleep deprivation and rebirth of ideas?

58:18 – If you were to go back in time when you first started your hedge fund, what would you have done differently with what you know now?

1:00:58 – Can you tell me more about the short selling conference and is this a good time to be short selling?

1:06:17 – What are your favorite books?

1:10:56 – What are your hobbies?

Enjoy and thanks for the listen!