Whitney Tilson: I Am Long LL

Whitney Tilson’s email to investors discussing his first stock recommendation Lumber Liquidators; The Seven Keys to Long-Term Investment Success; The Five Calamities That Can Destroy Your Life – And How to Avoid Them.

Seven Keys To Long-Term Investment Success

***Welcome to all of my new Empire Financial Daily readers! We’re all drowning in e-mails, ideas, and information – it’s like trying to drink from a firehose. So what I’ve been doing in these e-mails for nearly two decades is trying to separate the signal from the noise, as well as entertain, educate, and enrich my readers. I hope you enjoy it.***

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Q1 hedge fund letters, conference, scoops etc

1) I want to thank my many longtime friends and readers for helping make the launch of my newsletter, the Empire Investment Report, such an incredible success last night. More than 97,000 people signed up for the webinar, nearly 27,000 tuned in live, and more than 2,000 subscribed. It was a blockbuster night, and one I'll never forget!

Now, the onus is on my team and me to deliver solid investment research and money-making stock ideas to my subscribers. (No pressure!)

If you want to watch a replay of the webinar, you can do so here. We're still offering a great deal, so just click the link on the page if you'd like to subscribe.

(A few people e-mailed me to say that they had trouble accessing the website or got a busy signal when they called, so if you tried to subscribe last night but were unable to, please e-mail me and I'll make sure you get the special deal we offered.)

Also, I've been getting lots of wonderful feedback, none nicer than this e-mail from my old friend Chip Tucker, who once ran a "Tiger Cub" fund seeded by Julian Robertson. He wrote:

Whitney –

I was delighted to complete my due diligence on you by listening to your entire presentation tonight (!!!!). Very impressive!

You know, I don't subscribe to ANY investment newsletters, but I'm thrilled to be a charter member to this and your future offerings. You're not only an outstanding investor, teacher and communicator, but outstanding pretty much across the board – especially as a friend. I'm glad to observe and, in a small way, participate in your success as one of the greatest investing educators in the world.

And finally, I know the ideas you share will continue to contribute to my success.

Thank you – and let's ski soon!

Chip

Speaking of skiing, here are two pics of Chip and me in the Grand Canyon and skiing in Park City:

Tilson

2) The media has already picked up on the stock I recommended in yesterday's inaugural issue of the Empire Investment Report – I hope you're sitting down – Lumber Liquidators (LL). Yes, the very company I famously helped take down by feeding 60 Minutes the story of LL selling Chinese-made formaldehyde-drenched laminate flooring (you can watch the segment, which aired on March 1, 2015, here).

LL is now a buy, for reasons I outline in detail in my newsletter, which is immediately available right now to all paid subscribers. Here's an excerpt:

My recommendation to buy Lumber Liquidators may well be the most shocking stock pick of my career, given that I'm largely responsible for taking the company down. But in doing so, I got to know the company well. I spoke with three former senior executives and various industry insiders, giving me insights others don't have.

I think the stock is a buy for a number of reasons:

  • Lumber Liquidators has cleaned up its act...
  • Just last month, the company finally settled the last remaining lawsuits and regulatory investigations...
  • At its core, it's a great business...
  • Margins are likely to triple in the next two years from today's depressed levels...

This is only the fifth time in my career in which I've gone long a stock that I was once short. The first four resulted in a double in a year... a triple in a year... a 15-bagger in two years... and a 50-bagger in six years. I think LL is going to join this list of winners.

To read my full report, including insights from former senior LL executives, you can subscribe now by clicking here or calling 800-961-2618. We're offering a no-questions-asked, 30-day-money-back guarantee.

3) Here's part one of my article on The Seven Keys to Long-Term Investment Success. Excerpt:

I'll share seven of the simplest and most important lessons I've learned, and how you can apply them to immediately start to improve your investing results. We'll start with the first three today and close with the last four tomorrow.

  • First up: Don't speculate, avoid the hottest sectors, and think independently...
  • Next, you gotta let your winners run...
  • Rule No. 3 to your investment success is to tune out the noise and focus on fundamentals...

4) Longtime readers know that at the end of my daily e-mails I like to venture into non-investing-related topics. Today, I'm starting a series entitled The Five Calamities That Can Destroy Your Life – And How to Avoid Them.

Most people focus on all of the smart, sensible things they need to do to be successful in life: develop good habits, become a learning machine, cultivate integrity, attract mentors, and develop deep, lasting relationships, etc.

All are critically important... But almost as important is avoiding the many things can go wrong – the calamities.

This isn't the way most people like to think – myself included. I always tended to look forward with optimism and thought it was counterproductive to dwell on the negative... until I heard Charlie Munger at the Wesco annual meeting roughly 15 years ago, when he said, "All I want to know is where I'm going to die, so I never go there."

Everybody laughed, but not Munger. He continued:

I'm serious. Once you reach a certain position in life, you should spend most of your time trying to avoid the things that can derail your life and send you back to "go," or worse. That's true in investing, but it's also true in life. What happens to many people is that even when they've got it made, they can't help but lean out to try to grab the brass ring – and then fall, bringing themselves to ruin.

Munger actually devotes a lot of time in his talks to looking at the calamities that can derail an otherwise promising life or career. His cautions have had a tremendous impact on my own thinking, and I've distilled his thoughts into five calamities that explain the vast majority of lives I've seen derailed:

  • The death or serious injury of yourself or a loved one
  • Being in a bad marriage or suffering a permanently impaired relationship with a loved one
  • Ruining your reputation (often compounded by a stint in jail)
  • Losing your wealth
  • Addiction or abuse

In future e-mails, I'll do a deep dive into the details...

Best regards,

Whitney




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver