Why Whitney Tilson Is More Bearish Now

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Whitney Tilson’s email to investors discussing Bank some profits… Or don’t do anything; Podcast with Bill Ackman.

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Q1 2020 hedge fund letters, conferences and more

1) Following up on yesterday's e-mail, in which I explained why I've become more cautious on stocks over the balance of this year, I want to be clear about a few things...

First, I wasn't recommending selling everything and running to the hills with canned goods, guns, and gold. Far from it. I simply think that, with the S&P 500 Index now up more than 34% since its lows only 50 days ago, it's prudent to bank some profits and generate some "dry powder," so that you can play a strong hand if the market dips.

Top value fund managers are ready for the small cap bear market to be done

InvestorsDuring the bull market, small caps haven't been performing well, but some believe that could be about to change. Breach Inlet Founder and Portfolio Manager Chris Colvin and Gradient Investments President Michael Binger both expect small caps to take off. Q1 2020 hedge fund letters, conferences and more However, not everyone is convinced. BTIG strategist Read More

But if you have a multiyear investment horizon, you don't need to do anything. Years from now, it won't matter that stocks might have bounced around a bit in the last eight months of 2020. Just stick with the plan (or at least what I hope is your plan!) of living beneath your means, saving regularly, and investing the savings into blue-chip stocks and index funds.

Podcast with Bill Ackman

2) I really enjoyed this interview Shane Parrish did with my old friend Bill Ackman of hedge fund Pershing Square Capital Management. Here's the summary:

Today on The Knowledge Project, I'm talking with legendary investor, Bill Ackman. CEO of Pershing Square Capital Management, fund manager, husband, and father.

We talk about how he's bounced back from the brink of failure not once but twice, the lessons he's learned from his parents and raising kids of his own, his information sources, making big bets, the world today and where we might be headed.

Here are a few highlights from our conversation:

I think of philanthropy as something that is not genetic, it is learned, and it was something that my dad reinforced pretty much from the time I was a kid.

I've always had this view that success is not a straight line up. If you read the stories of successful people, almost every successful person has had to deal with some degree of hardship, whether that hardship is personal hardship, health-related hardship, or a business issue.

I've always had the view that how successful you are is really a function of how you deal with failure. If you deal with failure well and you persist, you have a high probability of being successful.

I admire people who take on unbelievable challenges and succeed.

One of the nice things psychologically about going to an office is that you go, you focus, and then when you come home it's easier to leave it behind and it's much harder to do that when your office phone is in the TV room.

I actually think that people will be that much more desperate for human connection after this experience than they were before.

Even [Warren] Buffett makes mistakes, which is instructive in and of itself. The good news is when you buy things as opposed to short things, your mistakes become smaller.

One of the most influential things he [Buffett] said to me was if you want to be successful, all you need to do is look around the room and think about the classmate or classmates you most admire and what qualities they have and just decide to adopt those qualities. If you do that, your chances of being successful go up enormously.

Best regards,

Whitney